Russia and the "resource curse"

Count Kaznacheev an unbeliever. For him, curses belong to folklore, not economics. “Not all countries are cursed,” he told the small room full of policy wonks chowing down on catered pasta, sandwiches and cookies.

Advertisement

Sure, according to the Index of Economic Freedom, nine out of the 10 least economically free countries are also resource-rich countries, Kaznacheev said, but that doesn’t tell the whole story. Look up, says Kaznacheev: half of the 10 most economically free countries at the top of the list are resource-rich as well.

The more economically-free, resource-rich nations tend to be wealthier, have lower crime and higher literacy and life expectancy rates. How can oil be a blessing for them but a curse to others?

“I don’t think it’s a resource curse, but maybe a resource issue,” Kaznacheev framed the problem, before guiding us into the heart of his analysis.

He advocates what he calls a moderate (pronounced “mow-der-aat”) institutional approach to solving the problem. He crunched an unfathomable amount of data and found that those countries with generally good governance and well-established property rights are going to be able to handle oil, gas and mineral revenues with little difficulty. They simply treat resource extraction much like they would any other industry.

Join the conversation as a VIP Member

Trending on HotAir Videos

Advertisement
Advertisement
Advertisement