concept

resource curse

Also known as: resource curse paradox, natural resource curse, paradox of plenty

Facts (20)

Sources

Energy asset stranding in resource-rich developing countries and ... frontiersin.org Frontiers Jun 10, 2024 19 facts

claimEffective policy for resource-rich developing countries must provide short-term incentives for existing elites while simultaneously addressing structural deficiencies related to the resource curse and poor socio-economic conditions.

claimAddressing policy barriers regarding asset stranding in resource-rich developing countries requires research into understanding and mitigating the resource curse and geo-economic barriers.

claimThe resilience of public administration and governments in resource-rich developing countries can be improved by fighting the resource curse through mechanisms such as transparent budget rules and macroeconomic policies designed to reduce volatility.

claimAsset stranding is a multi-faceted problem that particularly affects resource-rich developing countries (RRDCs) due to their heavy dependence on fossil fuels, limited prospects for economic diversification, inadequate political and social support structures, the presence of vulnerable populations, and the amplifying effects of the resource curse.

procedureAddressing fossil asset stranding in resource-rich developing countries requires a balanced policy mix that simultaneously addresses four areas: (i) reducing exposure risk, (ii) mitigating economic losses, (iii) tackling the resource curse, and (iv) reducing societal negative impact.

claimA primary goal for hydrogen partnerships must be to avoid creating new dependencies similar to the existing 'resource curse', as analyzed by Morgen et al. (2022).

claimFossil asset stranding exacerbates the vulnerability of populations and the inability of governments to mitigate consequences in countries already weakened by the resource curse, characterized by corruption and weak political institutions.

referenceSala-i Martin X. and Subramanian A. (2013) examined strategies for addressing the natural resource curse, using Nigeria as a case study in the Journal of African Economies.

claimThe 'resource curse' is a significant challenge for establishing just hydrogen partnerships.

referenceThe authors' analysis framework for asset stranding in resource-rich developing countries categorizes problems into four sets: exposure (risk of asset stranding), transition risk (asset stranding and revenue losses), resilience of public administration and government (the resource curse), and vulnerability and sensitivity (wider societal consequences).

claimContemporary crises in resource-rich countries exacerbate long-term institutional failure and the 'resource curse' phenomenon.

referencevan der Ploeg F. (2011) reviewed the economic impacts of natural resources, questioning whether they act as a 'curse or blessing' in the Journal of Economic Literature.

claimResource-rich developing countries (RRDC) face governance and institutional challenges, including high levels of corruption, limited financial resources, and constrained capacities to respond to crises, which are related to the 'resource curse' and hinder their ability to address the economic ramifications of asset stranding.

referenceThe 'resource curse paradox' (also known as the 'paradox of plenty') describes a situation where nations with abundant natural resources, such as fossil fuels, tend to exhibit lower economic growth, limited democratic development, or inferior overall development compared to nations with fewer resources.

claimDevelopment economics suggests that resource-rich developing countries need to diversify their economies to mitigate the 'resource curse' and reduce sector exposure to fossil fuel asset stranding.

claimExporting hydrogen represents a promising and profitable alternative to fossil fuels, which can help decrease the extent of the resource curse in energy-producing nations.

referenceOlayungbo (2019) analyzed the effects of oil export revenue on economic growth in Nigeria, specifically examining the 'resource curse' phenomenon using a time-varying analysis.

procedureA holistic policy approach is required to address asset stranding, which includes decreasing exposure risk, mitigating economic losses, addressing the resource curse, and reducing negative societal consequences.

referenceRoss M. L. (2015) analyzed the 'resource curse' phenomenon in the article 'What have we learned about the resource curse?' published in the Annual Review of Political Science.

Geopolitics of the energy transition: between global challenges and ... geoprogress-edition.eu Simona Epasto · Geoprogress Edition Oct 26, 2025 1 fact

claimCountries such as the Democratic Republic of Congo and Chile face the 'resource curse' paradox, where economic benefits from resource wealth often concentrate in the hands of local elites or foreign multinationals, leaving local communities exposed to negative environmental and social impacts.