The idea that resources might be more of an economic curse than a blessing first emerged as early as 1711, with English publication The Spectator noting, "It is generally observed, that in countries of the greatest plenty there is the poorest living.
An influential 1995 study by Jeffrey Sachs and Andrew Warner found a strong correlation between natural resource abundance and poor economic growth.
Bruce Bueno de Mesquita, who developed selectorate theory, explains that when an autocratic country has lots of natural resources, the ruler's optimal strategy for political survival is to use that revenue to buy the loyalty of critical support groups and oppress the rest of the population by denying them civil liberties and underfunding education and infrastructure.
By contrast, in a dictatorship with few natural resources, there may be a necessity for the ruler to liberalize his society somewhat so that the economy can be organized more efficiently, and to invest in education and healthcare to create a skilled and healthy workforce.
The increasing national revenue will often also result in higher government spending on health, welfare, military, and public infrastructure, and if this is done corruptly or inefficiently it can be a burden on the economy.
Abrupt changes in economic realities that result from this often provoke widespread breaking of contracts or curtailment of social programs, eroding the rule of law and popular support.
Real exchange rate increases, through capital inflows or the "Dutch disease" can make it appear an attractive option by lowering the cost of interest payments on the foreign debt, and they may be considered more creditworthy because of the existence of natural resources.
Resource-poor economies like Singapore, Taiwan or South Korea, by contrast, spent enormous efforts on education, and this contributed in part to their economic success (see East Asian Tigers).
Other researchers, however, dispute this conclusion; they argue that natural resources generate easily taxable rents that can result in increased spending on education.
No doubt, coal mining provides opportunities for relatively high-wage employment in the region, but its effect on prosperity appears to be negative in the longer run.
[47][48] A 2018 study in the Journal of Conflict Resolution found that rebels were particularly likely to be able to prolong their participation in civil wars when they had access to natural resources that they could smuggle.
[50] One study finds the mere discovery (as opposed to just the exploitation) of petroleum resources increases the risk of conflict, as oil revenues have the potential to alter the balance of power between regimes and their opponents, rendering bargains in the present obsolete in the future.
"[57] As of 2016, the only six countries whose reported military expenditures exceeded 6 percent of GDP were significant oil producers: Oman, South Sudan, Saudi Arabia, Iraq, Libya, Algeria (data for Syria and North Korea were unavailable).
Early Mafia activity is strongly linked[qualify evidence] to Sicilian municipalities abundant in sulphur, Sicily's most valuable export commodity.
[61] A 2017 study in the Journal of Economic History also links[qualify evidence] the emergence of the Sicilian Mafia to surging demand for oranges and lemons following the late 18th-century discovery that citrus fruits cured scurvy.
[63] A 2017 study found evidence of the resource curse in the American frontier period of the Western United States in the 19th century (the Wild West).
[64] The study found, "In places where mineral discoveries occurred before formal institutions were established, there were more homicides per capita historically and the effect has persisted to this day.
[65] A 2020 study determined that low levels of oil and gas revenue actually increases the likelihood of nonviolent resistance in autocratic countries, despite the general logic of the resource curse.
[66] Research shows that oil wealth lowers levels of democracy and strengthens autocratic rule because political leaders in oil-rich countries refuse democratic development because they will have more to give up from losing power.
[92][93] Corrupt members of national governments may collude with resource extraction companies to override their own laws and ignore objections made by indigenous inhabitants.
The authors argue that this stems from the fact that US relationships with oil producers were formed decades ago, before human rights became part of its foreign policy agenda.
Consistent with the use of force to gain power, positive price shocks also induce an increase in paramilitary violence and reduce electoral competition: fewer candidates run for office, and winners are elected with a wider vote margin.
Although it is often assumed that oil wealth leads to the formation of a distributive state that generously provides services in the areas of water, sanitation, education, health care, or infrastructure... quantitative tests reveal that oil-rich nations who experience demonstrations or riots provide better water and sanitation services than oil-rich nations who do not experience such dissent.
Studies suggest countries with abundant natural resources have higher levels of gender inequality in the areas of wages, labor force participation, violence, and education.
The failure of women to join the nonagricultural labor force has profound social consequences: it leads to higher fertility rates, less education for girls, and less female influence within the family.
[107]Ross argues that in oil-rich countries, across the Middle East, Africa, Latin America, and Asia, the need for female labor reduces as export-oriented and female-dominated manufacturing is ousted by Dutch disease effects.
The term was popularized by a 2013 book by Jeff Colgan that found that petrostates (states with 10% or more GDP from petroleum) are 250 percent more likely to instigate international conflicts than a typical country.
[125] Ecological studies have hypothesised that competitive forces between animals are major in high carrying capacity zones (i.e. near the Equator), where biodiversity is higher, because of natural resources abundance.
[127] Mutualism hypothesis was first described while Peter Kropotkin studied the fauna of the Siberian steppe, where environmental conditions are harsh, he found animals tend to cooperate in order to survive.
[133] In a companion paper, using data on 118 countries over the period 1970–2007, they show that it is the volatility in commodity prices, rather than abundance per se, that drives the resource curse paradox.