The curse of riches or resource curse has been a staple of development economics for decades. The curse refers to the striking fact that many resource rich states, such as Nigeria and Congo, are conflict-ridden basket cases while some of the world’s best performing economies are islands or city-states, such as Japan, Taiwan, and Hong Kong.
Numerous empirical studies have confirmed the existence of a curse, most famously a 1995 NBER working paper
by Jeffrey Sachs and Andrew Warner. Sachs and Warner noted that over
the 20-year period from 1970 to 1990, countries with a high percentage
of natural resource exports grew systematically slower than did those
with few resources. The following chart replots the data from their
Social Progress Index (SPI) to shed new light on their relative importance. >>>Read more
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