Affiliations: Mineral Economics Program, Western Australian School of Mines Curtin University of Technology, GPO Box U1987, Perth WA 6845, Australia. <[email protected]>
Abstract: This paper reflects upon the recent vigorous empirical and policy debate about whether significant mineral endowments are a blessing or a curse for the large number of developing nations that possess them. The traditional view argues that a large mineral endowment should be beneficial to a nation’s economic and social development. Proponents of the resource curse view, by contrast, contend that a combination of external market forces, internal economic stresses, and distorted policy-making is likely to lead to inferior performance by the mineral-rich nations. The recent empirical debate has occurred in three general areas: case-study-based analysis of mineral-rich economies, regression-based econometric analysis of the recent economic growth in natural resource-dependent economies, and more broadly based analyses of economic and social indicators. Despite important contributions, there is a need to consider a wider range of development indicators. If such analysis supports the work of scholars whose major interest has been in explaining variations in the GDP (gross domestic product) growth, the resource curse argument will be on stronger grounds. Using a simple conceptual framework that highlights good economic management and institutional stability, the final part of the paper seeks to reconcile key contributions to the policy debate by organizations such as the World Bank and Oxfam America.