| A variety of indicators suggest that despite an influx of revenues from natural resources, countries dependent on natural resources do no better, or even worse, than other countries. This dissertation explores this empirical observation and its antecedents. More centrally, it analyzes tactics that can be used by the wealth of actors involved in the extractive sector to improve the economic and political well-being of resource-rich nations and their citizens. In particular, this research distills guidelines regarding the design and management of policies to mitigate the political economy risks often accompanying natural resource windfalls in less developed countries.; The analysis in this dissertation suggests that, while there are weighty problems underlying the "resource curse", they have not been framed in a manner useful to policymakers. Resources are a problem in the absence of effective institutional constraints and a commitment to these "rules of the game". Without such restrictions to protect the windfalls and effectively ensure that the rent-seeking incentives don't trump the returns to productive activities, resources do not support beneficial progress.; Analysis of the experience with social funds, empirical work assessing the relevance of resource dependence, abundance, and governance to stability, as well as examination of the relevant policy options, lends new insight into what guardrails are most likely to keep these countries on, or redirect them towards, the road to prosperity. Thus, this research provides policy options to guide bureaucrats, international institutions, aid agencies, investors, and non-governmental organizations seeking to help developing countries hedge against the dangers the can accompany large surges of wealth. In particular, this analysis suggests that the mechanisms suggested so far to overcome the curse do not effectively involve capacity building and encouragement of bottom-up accountability. |
