Natural Resources, Aid, and Democratization: A Best-Case Scenario

Kevin Morrison, Department of Political Science, Duke University, presented Natural Resources, Aid, and Democratization: A Best-Case Scenario at a CGD seminar. Steve Knack, Research Department, World Bank served as the discussant.

Abstract: Literature on the "political resource curse"--the tendency for countries rich in natural resources to be more authoritarian--indicates that the principal problem with natural resources is their discretionary use by nondemocracies. This problem is also characteristic of much foreign aid. It makes sense, therefore, to funnel these resources away from the state in nondemocracies and toward the citizens, and this is in fact being attempted in many countries. Using formal analysis and building on existing theories of democratization, this paper analyzes whether such institutional solutions are likely to be successful, even when they work perfectly (the best-case scenario). The models show that even with these institutional safeguards, these resources diminish the chances for democratization. In addition to their practical importance, the results have an important theoretical implication: the political resource curse may not be due to state use of these resources, but simply to their very existence in nondemocracies.