When a country runs out of oil or some other precious natural resource, it may take it as a blessing; however, this finding is often very destructive. Recent studies in the social sciences suggest that resource-rich developing countries tend to have political crises. This paradox is called the resource curse, the political counterpart of the infamous Dutch disease (Lam et al., 2002)*. In this article I will discuss how this phenomenon not only hinders the development of liberal democracies in non-democratic regimes, but also how it actively destroys liberal values in developing democracies. Specifically, I will discuss how political instability, socioeconomic disparities, and political pacification produced by resource wealth tend to undermine the values of liberal democracy in the developing world. Special attention must be given to the claim that weak institutions are responsible for this decline. in democracy rather than in resource wealth itself (Lam et al., 2002). I admit this is partially true, however, weak institutions and the resource curse are not mutually exclusive. By definition, underdeveloped countries have weak institutions; similarly, countries with weak institutions are generally underdeveloped. Since this article focuses specifically on the development of resource-rich states, this criticism is not harmful, but rather complementary to my argument. When it comes to underdeveloped countries, the discovery of valuable resources can easily lead to resource dependence (Wantchekon, 1999: Anderson, 1995 , p. 33*; Robinson, 2006). As a result, political repression and political laziness often run rampant. In these circumstances the incumbent party is almost always re-elected due to conciliatory advantage… middle of the paper… intensity. Environmental and Resource Economics, 43, 183-207.Karl, T. (2007). Oil-driven development: social, political and economic consequences. CDDRL Working Paper 80. Robinson, J. A., Torvik, R. & Verdier T. (2006). Political foundations of the resource curse. Journal of Development Economics, 79, 447-468. Ross, M. L. (1999). The political economy of the resource curse. World Politics, 51 (2), 297-322. Ross, M. L. (2002). Oil hinders democracy. World Politics, 53(3), 325-361. Wantchekon, L. (1999). Why do resource-dependent countries have authoritarian governments? NewHaven: Yale University Press.Wick, K. & Bulte, E. (2006). Contesting resources: Rent-seeking, conflict, and the curse of natural resources. Public Choice, 128, 457–476. Wright, G. & Czelusta, J. (2004). Why economies slow down The myth of the resource curse. Challenge, 47 (2), 6–38.
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