The phenomenon of a "natural resource curse" has been observed in various settings and is a widely accepted theory. However, a research gap exits when it comes to the effect of natural resources on state failure. Qualitative literature suggests natural resources could have a negative effect on the stability of a state, however, a quantitative data analysis has yet to confirm this expectation.
This study therefore examines the relationship between oil and mineral wealth and the fragility of a state and investigates the research question "why do some states fail, while others do not?". After running a binomial logistic regression, the results suggest that oil wealth significantly fosters state fragility, while the effect of mineral wealth, although being generally as anticipated, is too small to be significant. The results can be regarded as a partial confirmation of the resource curse theory, although the lack of significance of the variable ‘mineral wealth’ spurs further research.
Table of Contents
1. INTRODUCTION
2. DEFINITIONS
3. LITERATURE REVIEW
4. THEORY
5. RESEARCH DESIGN
6. FINDINGS
7. LIMITATIONS
8. CONCLUSION
Research Objectives and Themes
This paper investigates the "resource curse" theory by examining the quantitative relationship between natural resource dependency—specifically oil and mineral wealth—and the likelihood of state failure. The research seeks to determine whether resource-rich countries are statistically more prone to collapse, thereby addressing a research gap in current qualitative literature.
- The impact of oil wealth on state stability and fragility.
- The influence of mineral dependency on the probability of state failure.
- Application of binomial logistic regression to state-level datasets.
- Comparative analysis of resource-dependent and resource-scarce nations.
- Evaluation of institutional quality and governance in the context of resource extraction.
Excerpt from the Book
1. Introduction
Natural resources, such as gold, diamonds, timber, oil, gas or coal are commonly seen as a blessing. These resources are easily extracted and traded for high prices on the global market. The revenues create high budgets for the state, which allows for low taxes and high spending on the public. However, for some reason, resource-rich countries also seem to have many problems. The Middle East, a region which is typically rich in oil resources, exhibits high levels of instability, conflict, repression and corruption (Ross, 2001). Similarly, with a look at state failure, resource-rich countries seem to be disproportionately affected. Iraq, Afghanistan, Liberia, Libya, Sudan, Nigeria, Angola, Zaire/Congo, are all examples of failed states in the past or present, which display high levels in resources, either fuels or minerals (Lynch, 2016).
On the contrary, resource-poor countries seem to have the upper hand. The Asian Tigers South Korea, Taiwan, Hong Kong and Singapore all demonstrated rapid industrialization and exceptionally high growth rates without owning any valuable resources worth mentioning.
But does this anecdotal evidence genuinely point to a trend? Are resource-rich countries really victims of their own wealth? In fact, there are also resource-rich countries with high growth, such as Canada, Norway, Australia or Botswana. For these countries, resources played the more intuitive effect of helping the economy grow and expand (Zubikova, 2018).
Summary of Chapters
1. INTRODUCTION: Outlines the paradox of the resource curse and defines the research objective to investigate the link between resource wealth and state failure.
2. DEFINITIONS: Establishes clear criteria for defining a "failed state" based on the monopoly of force, governance, and public service provision.
3. LITERATURE REVIEW: Analyzes historical theories including the Dutch Disease, rent-seeking models, and the political implications of resource wealth on regime type.
4. THEORY: Develops the research hypotheses, linking resource dependency to state fragility through mechanisms of civil war and social instability.
5. RESEARCH DESIGN: Describes the methodology, focusing on the integration of Fragile States Index and World Bank data for quantitative regression analysis.
6. FINDINGS: Presents the results of the binomial logistic regression, confirming a significant link between oil dependency and state failure while finding limited significance for mineral wealth.
7. LIMITATIONS: Discusses constraints regarding data selection, the binary classification of failed states, and the limited timeframe of the study.
8. CONCLUSION: Summarizes findings and suggests that while oil dependency increases state fragility, future research must encompass a broader range of minerals and longer timeframes.
Keywords
Resource curse, state failure, oil wealth, mineral dependency, fragility, binomial logistic regression, Fragile States Index, political economy, rent-seeking, civil war, authoritarianism, natural resources, governance, economic growth, democratization.
Frequently Asked Questions
What is the central focus of this research paper?
The paper examines the "resource curse" theory, specifically investigating whether a high dependency on oil and mineral resources increases the likelihood of a state failing.
What are the primary themes discussed in the study?
The study focuses on the intersection of economics and political stability, covering themes such as rent-seeking, authoritarian regime dynamics, civil conflict, and institutional performance.
What is the main research question of the work?
The research question is: "Why do some states fail, while others do not?" and specifically tests if natural resource wealth contributes to this failure.
What methodology does the author employ?
The author uses a quantitative approach, specifically employing a binomial logistic regression model on data gathered from the World Bank and the Fragile States Index.
What is covered in the main body of the paper?
The main body reviews existing literature on the resource curse, establishes the theoretical framework, explains the research design, and presents empirical findings based on regression analysis.
Which keywords best characterize the paper?
Key terms include: Resource curse, state failure, oil wealth, mineral dependency, fragility, and political economy.
Why did the author specifically choose to analyze oil and minerals separately?
The author distinguishes between them to test different economic impacts, as qualitative literature suggests they may affect states differently, which is confirmed by the study's finding that oil has a more significant impact than minerals.
What is the significance of the "rent-seeking" model in this study?
The rent-seeking model is used to explain how resource wealth incentivizes non-productive activities and favors powerful elites over broad democratic development, potentially destabilizing the state.
- Citar trabajo
- Marla van Nieuwland (Autor), 2019, Examining the Natural Resource Curse. Why Do States Fail?, Múnich, GRIN Verlag, https://www.grin.com/document/534855
