Hydrocarbons – Gift or Curse: Future Perspectives on their Use

Abstract

This article examines whether hydrocarbon wealth is a gift or a curse for the countries that possess it. The theoretical part defines the 'resource curse' as a set of negative economic, social or political effects arising from a country's possession of natural resources, traces the idea from early thinkers such as Machiavelli and Adam Smith to Richard Auty's 1993 introduction of the term, and reviews the concept of the rentier state and the 'rentier effect', through which resource revenues allow rulers to lower taxes, strengthen patronage and stay in power. It notes that research on the oil curse is limited by unreliable data and by an incomplete understanding of why its effects differ between countries and between minerals, and that no systematic programme of effective political and economic measures yet exists. The second part analyses countries with significant hydrocarbon reserves using indicators such as GDP per capita, the Gini coefficient, the main sector of the economy and the activity of wealth funds. The countries are ranked in three groups: Norway, South Korea and the United Arab Emirates lead; Malaysia, Japan, Saudi Arabia, Russia and Kazakhstan form a second group; and Nigeria and Venezuela form a third, where the authors point to oil and gas dependence, opaque or inactive resource funds and, in Venezuela, high inequality and economic crisis.

Abstract prepared by the editorial office from the full text of the article; the authors did not supply one.