Wednesday 13 January 2010

The Resource Curse

I came across a post on Marginal Revolution entitled Why is Haiti so poor? It's asking the question in the context of yesterday's earthquake.

Note point 3:

Sugar cane gave Haiti some early characteristics of "the resource curse," dating back to the 18th and 19th centuries.
The resource curse?

Here is a definition:

The resource curse (also known as the paradox of plenty) refers to the paradox that countries and regions with an abundance of natural resources, specifically point-source non-renewable resources like minerals and fuels, tend to have less economic growth and worse development outcomes than countries with fewer natural resources.
Doesn't that just ring a bell?

So many Nationalists point to the oil revenues that would accrue to an independent Scotland. Unlike some, I fully accept that a vast amount of such revenue would come under Scottish control. And yes, I do know where the Anglo-Scottish border is drawn over the North Sea. But would such wealth benefit us?

Us? Those revenues would go to the Scottish political class, not to we the people. And I see no reason to expect that the political class of an independent Scotland would behave differently to how that class behaves in most other parts of the world. The money would be spent on the favoured clientele of the political class.

And so I think that Scotland would probably be better off by exchanging all the oil revenues for a single copy of the Swiss constitution.

1 comment:

David Farrer said...

Comment made on previous template:

Business Boy
I agree to some extent David, but at least the political classes would or their elected business partners in crime would have to spend the money in Scotland, or most of it anyway. At least most of it would find its way into the pockets of your average Scot when other businesses benefit from this wealth; be it BMW dealerships, travel agencies, michelin-starred restaurants and George st. boutiques... 
Business Boy Blog

16 January 2010, 22:10:10 GMT