chapter  2
28 Pages

From resource curse to rent curse

A theoretical perspective
WithRichard M. Auty

The leading theories of the resource curse are rooted in economics or institutions and they are parsimonious and contested. This chapter offers a more nuanced theory, which suggests that the resource curse results from mismanaged rent-seeking. It argues that the resource curse is not a deterministic phenomenon and that its intensity varies over time and also with the natural resource linkages. Moreover, other forms of rent can replicate symptoms of the resource curse, notably foreign aid (geopolitical rent), worker remittances (labour rent) and government manipulation of relative prices (regulatory rent). The resource curse is therefore a manifestation of a broader rent curse.