The resource curse without natural resources: Expectations of resource booms and their impact

Frynas, Jedrzej George; Wood, Geoffrey; Hinks, Timothy

Abstract

© The Author 2016. Published by Oxford University Press on behalf of Royal African Society. All rights reserved. Many resource-rich countries have experienced a range of negative economic and political effects from natural resource extraction, often lumped together as the 'resource curse'. This article investigates to what extent expectations of future natural resource booms in São Tomé e Príncipe and Madagascar led to 'resource curse' effects, even though these countries did not experience the expected booms. It finds that both countries experienced resource curse effects as a result of future expectations, including volatile economic growth and eroded governance. The article demonstrates that shared aspirations and expectations alone may make for material political and economic outcomes even when they become visibly divorced from reality. Thus, there is much more to resource curse effects than simply the product of the material extraction of natural endowments. At a time of extremely volatile prices for primary commodities, and the relatively easy availability of investment capital and credit to support speculative ventures that in turn incentivize resource hype, it is likely that a growing number of countries may suffer the malign effects of a resource curse without natural resource extraction.

Citation

Frynas, J. G., Wood, G., & Hinks, T. (2017). The resource curse without natural resources: Expectations of resource booms and their impact. African Affairs, 116(463), 233-260. https://doi.org/10.1093/afraf/adx001

• Journal Article Type: Article
• Acceptance Date: Jan 16, 2016
• Publication Date: Jan 1, 2017
• Deposit Date: Mar 23, 2016
• Publicly Available Date: Jun 2, 2017
• Journal: African Affairs
• Print ISSN: 0001-9909
• Electronic ISSN: 1468-2621
• Publisher: Oxford University Press (OUP)
• Peer Reviewed: Peer Reviewed
• Volume: 116
• Issue: 463
• Pages: 233-260
• DOI: https://doi.org/10.1093/afraf/adx001
• Keywords: expectations, resource boom, macroeconomy
• Public URL: https://uwe-repository.worktribe.com/output/898690
• Publisher URL: https://doi.org/10.1093/afraf/adx001