—Decades ago, the common sense was that natural
resource abundance was a blessing for developing countries.
Yet those countries blessed with abundant natural resources
seem to suffer from the so called “resource curse.” In this paper
we summarize the dynamics of the resource curse and review
the major economic explanations for the curse: limited
economic diversification, revenue volatility, and an ailment
commonly known as the “Dutch Disease”. We review the
political explanation of the resource curse, which includes short
sightedness among policymakers, poor wealth management and
lack of human capital. Furthermore, we discuss whether
transparency can break the resource curse and illustrate the
manifestation of the resource curse in Libya, and contrasting
Libya’s experience with Botswana’s successful wealth
management then propose a number of policy
recommendations for combating the resource curse, drawing
from Botswana’s successful policies.
—Resource curse, economic growth,
Mingcong Li is with the School of Arts and Sciences, University of
Pennsylvania, Philadelphia, PA 19104 USA, on leave from the Beijing
International Studies University, China (e-mail: email@example.com).
Cite:Mingcong Li, "Corruption, Transparency and the Resource Curse," International Journal of Social Science and Humanity vol. 3, no. 6, pp. 572-575, 2013.