World Politics

Review Articles

The Political Economy of the Resource Curse

Michael L. Rossa1*

a1 University of Michigan, Ann Arbor

Terry Lynn Karl. The Paradox of Plenty: Oil Booms and Petro-States. Berkeley: University of California Press, 1997, 342 pp.

Jeffrey D. Sachs and Andrew M. Warner. Natural Resource Abundance and Economic Growth, Development Discussion Paper no. 517a. Cambridge: Harvard Institute for International Development, 1995, 49 pp.

D. Michael Shafer. Winners and Losers: How Sectors Shape the Developmental Prospects of States. Ithaca, N.Y.: Cornell University Press, 1994, 272 pp.

Abstract

How does a state's natural resource wealth influence its economic development? For the past fifty years, versions of this question have been explored by both economists and political scientists. New research suggests that resource wealth tends to harm economic growth, yet there is little agreement on why this occurs. This article reviews a wide range of recent attempts in both economics and political science to explain the “resource curse.” It suggests that much has been learned about the economic problems of resource exporters but less is known about their political problems. The disparity between strong findings on economic matters and weak findings on political ones partly reflects the failure of political scientists to carefully test their own theories.

Michael L. Ross is Assistant Professor of Political Science at the University of Michigan, Ann Arbor. His forthcoming book is on the impact of commodity booms on state institutions; it includes case studies of the Philippines, Indonesia, and Malaysia.

* For their generous comments on earlier drafts of this article, I am grateful to Chris Achen, Pradeep Chhibber, Richard Doner, Robert Franzese, Suzi Kerr, Miriam Lowi, Robert Pahre, Jeffrey Vincent, Jennifer Widner, and two anonymous reviewers.