Resource Curse Analysis

Resource curse analysis is the empirical study of the paradox that economies rich in natural resources — oil, gas, minerals — often grow more slowly, remain less democratic, and suffer more conflict than resource-poor economies. Jeffrey Sachs and Andrew Warner's influential work, summarized in their 2001 European Economic Review article, documented a robust negative cross-country correlation between resource dependence and economic growth. Michael Ross's 2001 World Politics article extended the logic to politics, showing statistically that oil wealth is associated with weaker democracy through rentier, repression, and modernization mechanisms. The workhorse method is a cross-country regression of growth or democracy on a measure of resource dependence with controls for the standard determinants of development.