ABSTRACT
A nation endowed with mineral wealth is far less privileged than one might imagine, especially if it is unlucky enough to be in an already underdeveloped region. Consider a poor country in Latin America or sub-Saharan Africa, with a history of exploitation by colonial rule and local elites, caught up in vicious circles of institutional decline, having inadequate access to healthcare, education and jobs, and already wholly dependent on foreign exchange revenue from marginal earnings from agricultural commodity exports. The sudden discovery of significant quantities of mineral resources under its control will jolt its political and economic elites into reorganizing themselves into stewards of an extractive economy that relies primarily on external expertise to
manage investments, technology and planning. For speedy production of the resource and transfer into global commodity markets, large global corporations are brought in whose revenues may well exceed the country’s domestic output. The contracts will almost undoubtedly have terms that are unfavorable to the public interest, but advance the private interests and power of a small elite network of public officials, local oligarchs, and representatives of the resource extraction industry.
