When a country strikes oil, or some other valuable natural resource, they may take it as a blessing; however, this discovery is often very destructive. Recent studies in social sciences suggest that developing countries with resource wealth tend to have political crises. This paradox is called the resource curse- the political counterpart of the infamous Dutch disease (Lam et al., 2002)*. In this paper I will argue how this phenomenon not only impedes the development of liberal democracies in non-democratic regimes, but also how it actively destroys liberal values in developing democracies. In specific, I will discuss how political instability, socio-economic disparities and political appeasement produced by resource wealth tend undermine the values of liberal democracy in the developing world.
Special attention must be given to the claim that weak institutions are to blame for this decrease in democracy rather than resource wealth in itself (Lam et al., 2002). I concede that this is partially true, however, weak institutions and the resource curse are by no means mutually exclusive. By definition, undeveloped countries have weak institutions; likewise, countries with weak institutions are generally undeveloped. Since this paper focuses particularly on developing resource rich states, this criticism is not detrimental- but rather complimentary to my argument.
When it comes to undeveloped countries, the discovery of valuable resources can easily lead to resource dependence (Wantchekon, 1999: Anderson, 1995, p. 33 *; Robinson, 2006). As a result, political repression and political laziness often run rampant. Under these circumstances the incumbent party is almost always re-elected because of the appeasive payoff...
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In the article Blood Barrels: Why Oil Wealth Fuels Conflict, Michael L. Ross claims that “oil wealth often wreaks havoc to a country’s economy and politics”, and fuels or is intricately involved in the majority of the world’s civil wars. The oil curse, as he calls it, begins with a country’s massive economic growth after the discovery of oil deposits, followed by the local government incurring in copious debts, squandering oil revenues, and, in many occasions, suffering from the Dutch Disease, which creates absolute economic dependability on petroleum. This curse paves the way towards armed conflict, because oil wealth leads to economic unrest that leads to further political instability, often helps to support insurgencies, and encourages separatism of enclosed economic enclaves (Ross).
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There have been enormous efforts to spread democracy as a political system throughout the world by the developed democratic countries and the international development organizations including the World Bank. By the late 1990s the United States alone spent over a half billion dollars to promote democratic expansion throughout the world (Diamond, 2003). These were done considering that the democratic system leads towards development. As a result in the late 20th century we saw a huge political transformation towards democracy. During the last few decades a huge number of countries adopted democracy as their political system. However, it retain a big question how far democracy is successful in bringing development of a country? At this stage, some people also criticizes the effort of democratization arguing that it is done without considering the context of a country, sometimes democracy is not ideal for all countries and it is an effort to extinct diversity of political system. In studying the literature regarding the debate, we found a paradoxical relationship between democracy and development. Some argue that democracy has failed to ensure expected outcomes in terms of development. While others confronted that democracy has a considerable impact on development. Another group of people argue that form of political system actually does not have any impact on development process. On the verge of these debates, some development institutions and academics throw light on why democracy is not working properly, and what measure should be taken to make it more successful in bringing effective development of developing countries. Consequently, this writing is an effort of revisiting the different views about impact of democra...
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Why nations Fail: The Origins of Power, Prosperity, and Poverty, is a captivating read for all college economic courses. Coauthored by Daron Acemoglu and James A. Robinson, they optimistically attempt to answer the tough question of why some nations are rich and others are poor through political economic theories. They lay it all out in the preface and first chapter. According to Acemoglu and Robinson, the everyday United States citizen obtains more wealth than the every day Mexican, sub-Saharan African, Ethiopian, Mali, Sierra Leonne and Peruvian citizen as well as some Asian countries. The authors strategically arranged each chapter in a way that the reader, whomever he or she is, could easily grasp the following concept. Extractive nations that have political leadership and financial inconsistencies within their institutions are the largest contributor to poverty and despair within most countries. It also states that countries with socioeconomic institutions that work ‘for the people and by the people’, or in other words, focus on the internal agenda of that
Firstly, K. Isbester mentions that democracy has a different meaning for everyone, as some can define democracy as a good aspect for development, on the contrary other believe that it is nothing more than voting after several years. Although, Latin America see democratic g...
Smith, R.K. (1996). Understanding third world politics: theories of political change and development. Bloomington: Indiana University Press.
These interactions exist when rulers are induced to develop by either international (external threats) or domestic factors (low natural-resource intensity) but at the same time they are facing privileged interests with strong bargaining power, i.e., when social wealth is highly concentrated. In such cases autocrats have the incentives to follow growth-enhancing policies but are not capable of enacting and implementing the most efficient strategy because rulers and technocrats are relatively weak relative to the dominant socioeconomic forces. In such a situation, rulers are not able to enforce contracts and establish impartial judicial systems, provide public goods for the poor, and remove existing price distortions. Moreover, it seems less likely that the dominant socioeconomic actors are internationally competitive at a country’s earlier stages of development. Dominant socioeconomic actors in such situations tend to be the highly asset-specificity sectors such as landlords or the highly protected import-substitution sectors. Implementing development-oriented policies typically requires another powerful actor to be able to break the existing equilibrium. For instance, initiating land reforms, shifting industrial policies from import substitution policy to export-oriented policy, eliminating non-performing loans, or removing
Extractive institutions are used throughout this book to explain that the upper class extracts resources and goods from the lower class. They don’t allow growth or competition, but rather they just exploit the rest of society into doing their labour. It’s used to please a few, rather than the majority, and can still be seen in most places in the world. Whereas, inclusive institutions are the ideal way nations should be run, allowing for fair economical systems, property ownership, educational facilities and allowing all citizens to participate in the growth of the economy. Acemoglu and Robinson argue that this is the main factor in distinguishing the rich countries from the poor and, moreover, how they treat their citizens. This system is relatively used in North America and Western Europe.