The Resource Curse in the context of "Socialism of the 21st Century"

How Governance in Venezuela and Ecuador Influences the Transfer of National Resource Wealth into Economic Development

Bachelor Thesis , 2010 , 31 Pages , Grade: 1,33

Business economics - Economic Policy

Ecuador and Venezuela, two Latin American OPEC member states, experienced a socioeconomic upheaval with the windfall petroleum revenues beginning in the 1970s. The oil bonanzas, however, negatively affected the development in the two countries, which show minimal economic growth and political instability throughout the last thirty years. The paradoxical phenomenon can be explained with the resource curse theory. This paper starts with determining the extent of the resource curse and its forms of appearance in both countries. In a second step, it investigates good governance trends in Ecuador and Venezuela in recent years, using the World Bank indicators as guideline. This is done in order to test the hypothesis whether the current left-oriented governments are better able to tame the resource curse with their “innovative” political ideology. The findings display a downward development in good governance since presidents rule who advocate ‘Socialism of the 21st century’. In fact, such an ideology is no remedy to the resource curse but tends to reinforce the negative economic situation, which in return is likely to deteriorate good governance even further. As the results are similar in both countries, one can possibly attribute the described trend to that form of governance in a more generalized manner.

Inhaltsverzeichnis (Table of Contents)

• Introduction
• Conceptual Framework and Country Introduction
• The Resource Curse Phenomenon
• Socio-Economic Situation in Ecuador and Venezuela
• The Presence of the Resource Curse in Ecuador and Venezuela
• Governance, and Natural Resource Policies: Exploring the Political Linkage between Wealth in Petroleum, and Failure of Socio-Economic Development
• Conceptualizing Good Governance
• Measuring Good Governance: Evaluating the two countries
• Comparison: Latin-American Governance Pattern of "Socialism of the 21st Century"?
• Conclusion: Trapped in the Vicious Circle.

Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)

This paper explores the resource curse phenomenon and its influence on the socio-economic development of Ecuador and Venezuela. The primary objective is to examine how governance, particularly the “Socialism of the 21st Century” model, impacts the transfer of national resource wealth into economic development in these countries.

• The impact of the resource curse on economic development in Ecuador and Venezuela
• The relationship between governance and the resource curse
• The effectiveness of the "Socialism of the 21st Century" model in addressing the resource curse
• The role of good governance in managing natural resource wealth
• Comparative analysis of governance patterns in Ecuador and Venezuela

Zusammenfassung der Kapitel (Chapter Summaries)

• Introduction: The chapter introduces the topic of the resource curse and its impact on oil-rich countries. It focuses on the specific cases of Ecuador and Venezuela, highlighting their political context and the presence of left-oriented governments. The chapter also emphasizes the importance of examining governance in relation to the resource curse.
• Conceptual Framework and Country Introduction: The chapter provides a theoretical framework for the resource curse phenomenon, outlining its key characteristics and its relevance to Ecuador and Venezuela. It also introduces the socio-economic situation in both countries, highlighting the challenges they face.
• The Presence of the Resource Curse in Ecuador and Venezuela: The chapter analyzes the extent to which the resource curse affects both countries, using established measurement tools and exploring its different forms of manifestation.
• Governance, and Natural Resource Policies: Exploring the Political Linkage between Wealth in Petroleum, and Failure of Socio-Economic Development: The chapter delves into the crucial connection between governance and the resource curse. It defines good governance and examines its role in managing resource wealth. Using World Bank indicators and qualitative examples, the chapter evaluates governance trends in Ecuador and Venezuela.

Schlüsselwörter (Keywords)

The key themes and concepts explored in this paper include the resource curse, good governance, "Socialism of the 21st Century," oil wealth, economic development, political instability, and socio-economic challenges in Ecuador and Venezuela.

• College: Jacobs University Bremen gGmbH
• Grade: 1,33
• Publication Year: 2010
• Pages: 31
• Catalog Number: V176308
• ISBN (eBook): 9783640975525
• ISBN (Book): 9783640975037
• Language: English
• Tags: resource, curse, century”, governance, venezuela, ecuador, influences, transfer, national, resource, wealth, economic, development