The Challenges of State Building in Resource Rich Nations

Norman, Matthew L. | January 1, 2012

Nations rich in primary commodities, whether minerals, timber, or fossil fuels, have experienced sharply divergent outcomes: where strong state institutions developed prior to large-scale resource exploitation, resource wealth has generally been beneficial; where, however, resource exploitation preceded the formation of a functional state, the results have been negative on average, and in some cases disastrous. The combination of a weak state and primary commodity exports has been shown to reduce economic growth, erode governance, and increase the risk of civil wara stylized fact that has come to be known as the “resource curse.” The international community’s efforts to address the resource curse have tended to depend on implementation within resource exporting countries – a serious weakness given that a defining feature of resource cursed states is the inability to regulate and manage resource wealth. Only a better understanding of the particular institutional pathologies underlying the resource curse can make it possible to address the problem at its source. In this article, I will attempt to provide the outline of such an understanding and support it with a case study of the Democratic Republic of Congo (DRC).