Many countries receiving natural resource windfalls have had slow growth, low incomes and weak political institutions, an empirical regularity named the resource curse. Patterns in the data suggest a political link: a curse is most likely for countries that have weak institutions initially and for resources that are spatially concentrated. Rent seeking for a resource prize is a prominent theme in theoretical explanations. There is extensive evidence supporting both the curse and a political transmission channel. Three aspects of this chapter are particularly important for rent seeking: (1) political theories of the resource curse consistently predict over-dissipation, a finding at odds with ex ante predictions of rent-seeking rational Nash behavior; (2) variations in pre-windfall political institutions can magnify, moderate or overturn the resource curse; and (3) a resource windfall can alter the quality of political institutions.
You are not authenticated to view the full text of this chapter or article.
Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.
Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.
Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.