Resource Curse: Experience Study on Economic Development of Petroleum Countries

This paper studies the causes of “resource curse” from the perspective of “national utilization of petroleum resources” and uses the samples of eight typical oil resource-rich countries to study their national economic growth status. Empirical studies show that the resource curse effect of most countries is caused by “Dutch disease". Relying too much on the development of the oil resources industry, with the unreasonable industrial structure, the excessive export of oil resources, and the “extrusion effect” of production factors are the reasons that delay the technological innovation and development of the industry and inhibit the balanced development of other industries.

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The Policy Framework of Natural Resource Management in Oil-Dependence Countries

Economies ◽

10.3390/economies9010025 ◽

2021 ◽

Vol 9 (1) ◽

pp. 25

Author(s):

Basem Ertimi ◽

Tamat Sarmidi ◽

Norlin Khalid ◽

Mohd Helmi Ali

Keyword(s):

Resource Management ◽

Natural Resource Management ◽

Natural Resource ◽

Empirical Studies ◽

Resource Curse ◽

Policy Framework ◽

Ecological Resources ◽

Starting Point ◽

Oil Revenues ◽

Rich Countries

A variety of critical empirical studies are interested in and focused on complex issues related to natural resource management and resource curse, whilst less can be found combining diverse factors that affect the dynamics of this curse and mitigate it. The case study of Norway is used as the benchmark policy framework in oil-rich countries to invest oil revenues and set correct fiscal policies. In this study, an analytical framework was structured to evaluate the coherence of resource management with sustainability as a starting point, contributing to further assessments of how the adaptation of such policies is incorporated in resource management to mitigate the resource curse. The analysis also suggests that oil-rich countries can learn from Norway’s experience to mitigate this resource curse and utilize oil revenues in the interest of the country. In addition, the analysis helps in effective management and the protection of ecological resources as these are becoming an increasingly important strategic part of natural wealth. This study aimed to provide an overarching framework designed to help conceptualize key issues of natural resource management and the resource curse in oil-rich countries and understand the challenges facing those countries in managing the natural resources.

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Natural Resources and Socio-Economic Progress

MGIMO Review of International Relations ◽

10.24833/2071-8160-2014-4-37-168-186 ◽

2014 ◽

pp. 168-186

Author(s):

L. M. Kapitsa

Keyword(s):

Natural Resources ◽

Resource Curse ◽

Dutch Disease ◽

Economic Diversification ◽

New Approaches ◽

Economic Progress ◽

Rich Countries ◽

Disease Specific

The article reviews international debates on development problems of the resource-based economies. It draws atten tion to causes and mechanisms of the so-called "resource curse" and symptoms of systemic breakdowns and stagnant phenomena in resource-based economies named "Dutch disease". Specific attention is given to the role of national elites and institutions in the emergence of "Dutch disease", preservation of economic backwardness and/or de-industrialization of resource-rich countries. The author also considers new approaches to resolving the problem of'resource-curse", in particular, return to traditional instruments of economic diversification as industrialization and protectionism.

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A note on the Dutch disease

Applied Studies in Agribusiness and Commerce ◽

10.19041/apstract/2019/3-4/4 ◽

2019 ◽

Vol 13 (3-4) ◽

pp. 34-38

Author(s):

Wim Heijman

Keyword(s):

National Economy ◽

Negative Impact ◽

Resource Curse ◽

Jel Classification ◽

Dutch Disease ◽

Poor Countries ◽

Trade Model ◽

Resource Poor ◽

Effective Policy ◽

Rich Countries

Many resource rich countries are poor, where many resource poor countries are rich. One of the possible explanations of this paradox called the ‘resource curse’ is the Dutch Disease. This paper aims to analyse this phenomenon with the help of a simple macroeconomic trade model. It presents a number of Dutch Disease Cases of which the ‘Norwegian Case’ provides an example containing an effective policy against the negative impact of Dutch Disease on the national economy. JEL Classification: O11, O24, Q33

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Mechanisms of Resource Curse and Economic Policy

Voprosy Ekonomiki ◽

10.32609/0042-8736-2007-6-4-27 ◽

2007 ◽

pp. 4-27 ◽

Cited By ~ 11

Author(s):

V. Polterovich ◽

V. Popov ◽

A. Tonis

Keyword(s):

Real Exchange Rates ◽

Resource Curse ◽

Budget Deficits ◽

Resource Abundance ◽

Fuel Prices ◽

Use Of Resources ◽

Resource Wealth ◽

The One ◽

The Right ◽

Rich Countries

This paper compares various mechanisms of resource curse leading to a potentially inefficient use of resources; it is demonstrated that each of these mechanisms is associated with market imperfections and can be "corrected" with appropriate government policies. Empirical evidence seems to suggest that resource abundant countries have on average lower budget deficits and inflation, and higher foreign exchange reserves. Besides, lower domestic fuel prices that are typical for resource rich countries have a positive effect on long-term growth even though they are associated with losses resulting from higher energy consumption. On top of that resource abundance allows to reduce income inequalities. So, on the one hand, resource wealth turns out to be conducive to growth, especially in countries with strong institutions. However, on the other hand, resource abundance leads to corruption of institutions and to overvalued real exchange rates. On balance, there is no solid evidence that resource abundant countries grow more slowly than the others, but there is evidence that they grow more slowly than could have grown with the right policies and institutions.

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Crisis Reactions and Their Consequences for the Real Sector of the Russian Economy

Voprosy Ekonomiki ◽

10.32609/0042-8736-2011-1-39-50 ◽

2011 ◽

pp. 39-50

Author(s):

V. Lushin

Keyword(s):

Financial Crisis ◽

Acute Phase ◽

Dutch Disease ◽

Added Value ◽

Real Sector ◽

The Real ◽

Balanced Development ◽

Russian Economy ◽

The Government ◽

State Modernization

The author analyzes factors that led to a deeper fall in output and profitability in the real sector of the Russian economy in comparison with other segments during the acute phase of the financial crisis. It is argued that some contradictions in the government anti-recession policy, activities of the financial sector and natural monopolies lead to pumping out added value created in manufacturing and agriculture, increase symptoms of the «Dutch disease», etc. It is shown that it may threaten the balanced development of the Russian economy, and a set of measures is suggested to minimize these tendencies and create a basis for the state modernization policy.

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Has the Sovereign Wealth Fund of Azerbaijan (SOFAZ) Been Able to Promote Economic Diversification?

Canadian Journal of European and Russian Studies ◽

10.22215/cjers.v8i1.2484 ◽

2013 ◽

Author(s):

Vahid Yücesoy

Keyword(s):

Fossil Fuels ◽

Dutch Disease ◽

Future Generations ◽

Direct Control ◽

Economic Diversification ◽

Sovereign Wealth Funds ◽

Sovereign Wealth Fund ◽

Rentier States ◽

Oil Revenues ◽

Rich Countries

Oil-rich countries have oftentimes been confronted with the challenge of diversifying their economies away from oil dependence given the exhaustible nature of these fossil fuels. Investing in sovereign wealth funds has been one of the most ubiquitous ways of preparing for the post-oil period. Investing in sovereign wealth funds rather than directly injecting the oil revenues in the economy not only precludes the outbreak of the Dutch Disease (which is known for giving rise to an exchange rate appreciation, crowding out non-oil industries and keeping the economy reliant on oil), but it also saves for future generations. Yet, in the case of Azerbaijan, the Sovereign Wealth Fund of Azerbaijan (SOFAZ), founded in 1999, has only increased this reliance on oil. Using the rentier states theoretical framework, this paper will argue that the direct control over SOFAZ exercised by the president and the lack of consultation with the NGOs have made corruption easier, making the task of economic diversification more difficult. This has been possible because through corruption the president has often resorted to oil money to buy peace rather than invest it in economic diversification. As a result, since the foundation of SOFAZ, the country is more reliant, not less, on oil. Full text available at: https://doi.org/10.22215/rera.v8i1.223

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Popular Resource Sovereignty

10.1093/oso/9780190905651.003.0002 ◽

2018 ◽

Author(s):

Leif Wenar

Keyword(s):

Human Rights ◽

Natural Resources ◽

Large Scale ◽

Good Reason ◽

Resource Curse ◽

Civil Conflict ◽

Popular Sovereignty ◽

State Sovereignty ◽

The People ◽

Rich Countries

Article 1 of both of the major human rights covenants declares that the people of each country “shall freely dispose of their natural wealth and resources.” This chapter considers what conditions would have to hold for the people of a country to exercise this right—and why public accountability over natural resources is the only realistic solution to the “resource curse,” which makes resource-rich countries more prone to authoritarianism, civil conflict, and large-scale corruption. It also discusses why cosmopolitans, who have often been highly critical of prerogatives of state sovereignty, have good reason to endorse popular sovereignty over natural resources. Those who hope for more cosmopolitan institutions should see strengthening popular resource sovereignty as the most responsible path to achieving their own goals.

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Conclusion

10.1093/oso/9780198787174.003.0011 ◽

2017 ◽

Author(s):

Jonathon W. Moses ◽

Bjørn Letnes

Keyword(s):

Natural Resources ◽

Resource Curse ◽

Specific Model ◽

Dutch Disease ◽

Political Conditions

There is broad recognition that Norway manages its natural resources successfully. Policymakers are flocking to Norway to try to learn the lessons provided by the Norwegian model. This book describes the main challenges facing policymakers in resource-rich states (e.g., Dutch Disease, Resource Curse, Paradox of Plenty), and the sort of institutional solutions and policies that are available to them. We explain why the Norwegian authorities chose the solutions they did, and how these choices have changed over the years, in response to changing market and political conditions. The result is a book that offers insight and understanding as to why the country made the choices it did, rather than providing a specific model for export.

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Improving Relations between a State and a Business Enterprise in the Context of Counteracting Adverse Effects of the Resource Curse

Sustainability ◽

10.3390/su13031067 ◽

2021 ◽

Vol 13 (3) ◽

pp. 1067

Author(s):

Marek Szturo ◽

Bogdan Włodarczyk ◽

Alberto Burchi ◽

Ireneusz Miciuła ◽

Karolina Szturo

Keyword(s):

Economic Policy ◽

Natural Resources ◽

Resource Sharing ◽

Global Economy ◽

Empirical Studies ◽

Relevant Literature ◽

Resource Curse ◽

Mineral Resources ◽

Strategic Resources ◽

Key Resources

Natural resources play a significant role in the development of the global economy. This refers, in particular, to strategic fuel and mineral resources. Due to the limited supply of natural resources and the lack of substitutes for most of the key resources in the world, the competition for the access to strategic resources is a feature of the global economy. It would seem that the countries which are rich in resources, because of this huge demand, enjoy spectacular economic prosperity. However, the results of empirical studies have demonstrated what is known as the ‘resource curse’. This article concentrates on the characteristics of the paradox of plenty, and in particular on the possibilities of preventing this phenomenon. The aim of this article is to identify the measures of economic policy with which to counteract the resource curse, based on the relationship between the state and the extraction business. Upon the critical analysis of the relevant literature, we concluded that the state’s economic policy, implemented in cooperation with the extraction business, is increasingly important for the prevention of the resource curse. In the context of the resource curse, the optimal and most consensual instrument, in comparison with other resource sharing agreements, is a production sharing agreement (PSA), which should also be adjusted to the current local economic conditions in a given country.

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