Sub-Saharan Africa and the resource curse: limitations of the conventional wisdom

This paper takes into consideration, the ‘resource curse thesis’ that is widely accepted in academic and policy circles and symptomatic of the current ‘good governance’ agenda.

It is explained that natural resources have been central to debates about economic development since Malthus and Ricardo. Rising global commodity prices, instability in the Middle East and the industrial expansion of major emerging market economies all reinforce the centrality of natural resources in contemporary political agendas. In its strong form the thesis argues that natural resource wealth undermines economic growth under weak institutional conditions. However, it does not provide a robust basis for practical interventions. Rather, acknowledgement of ignorance is a first step towards widening policy space and promoting local solutions.

The paper concludes that:

• the resource curse thesis has profound practical implications - fashionable policy responses direct attention to formal institutional design fixes as if these were somehow distinct from the ‘bad’ political equilibria which lie at the core of the presumed resource curse itself 
• in light of actual ignorance about how to nurture institutions, expectations as regards what these policies can achieve should be modest - in contrast, there should be much greater space for local policy experimentation and adaptation 
• advanced countries would be advised to focus on the ways in which external actors facilitate poor natural resource management outcomes in lower income countries - ultimately, this will demand placing developmental goals ahead of domestic geopolitical and economic priorities 
• if history is any guide, it will remain more convenient to vilify repressive regimes, failed states and ‘bad governance’, than to excavate skeletons buried closer to home.