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The resource curse, also known as the "Paradox of Plenty," is the often-occurring paradox that nations with an abundance of non-renewable natural resources tend to have less successful development than other countries.
Non-renewable resource - generally fossil fuels and minerals - tend to drive a competition among elites (political elites, military, and other groups) and corporations to exploit the resource. The country's political development and its citizens tend to suffer.
Not all such resource-rich countries suffer the resource curse. An effective way to avoid the curse is to levy higher taxes relative to other activities, and place the earnings in a form of trust that cannot be easily be accessed for short-term political purposes such as "vote buying" through excess spending. Norway is an excellent example of this and many other countries are following its lead.
Notes and references
- The Resource Curse - podcast interview, Late Night Live - ABC Radio National (Australian Broadcasting Corporation).
- The Resource Curse - podcast interview, Late Night Live - ABC Radio National (Australian Broadcasting Corporation)
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