Chapter

Political Economy of Resource-Abundant States

Richard M. Auty and Alan H. Gelb

in Resource Abundance and Economic Development

Published in print October 2004 | ISBN: 9780199275786
Published online April 2005 | e-ISBN: 9780191602160 | DOI: http://dx.doi.org/10.1093/0199275785.003.0008

Series: WIDER Studies in Development Economics

Political Economy of Resource-Abundant States

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This chapter examines the relationship between political economy and natural resource endowment using an extension of Lal’s (1995) typology of political states. The extended typology explains why the governments of resource-abundant countries are less likely to align their interests with those of the majority than the governments of resource-deficient countries. Natural resource rents feed conflicts so that the resource-abundant country has a factional or predatory government that relaxes market discipline in capturing and redistributing the rents. Thus, the economy is deflected from its comparative advantage and cumulates economic distortions that retard growth and/or cause the economy to depend on a weakening primary sector.

Keywords: political economy; natural resource endowment; resource-abundant countries

Chapter.  7704 words.  Illustrated.

Subjects: Economic Development and Growth

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