06 March 2010

Whither the Resource Curse?

The backlash is coming!

Apparently, economists are now discovering that getting more money doesn’t always make you poorer.

Who woulda thought it!

What we seem to have experienced over the past few years is a massive smart-arsed-economist Freakonomics-syle “counterintuitive finding”-obsession FAIL.


Yes, free money accruing to governments (resources or aid) probably doesn’t do much for their accountability, but does this governance effect really outweigh the free-money effect? Are the institutional effects of free-money so damaging that free money makes countries poorer? Or are we just trying too hard to be clever and “counterintuitive.”?

(As a final aside – the resource/aid/free-money curse only exist when the money is flowing to the government. Giving oil revenues or aid directly to poor people rather than to their governments is obviously logistically more difficult, but ameliorates this problem entirely).


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