The Paradox of Oil Wealth
Countries rich in oil and other natural resources tend to have authoritarian governments, be economically unstable, and experience more frequent civil strife than countries without oil.
What explains this oil curse? Political scientist Nimah Mazaheri took on those issues in his book Oil Booms and Business Busts: Why Resource Wealth Hurts Entrepreneurs in the Developing World (Oxford University Press, 2016), and now will offer a free, public webinar on the subject. Sponsored by the Tufts University Alumni Association, “The Perils and Promise of Oil Wealth” will be held on February 7.
“There are studies that have been done that show that having abundant oil in particular leads to uneven economic development, slower rates of development, and an autocratic state along with more conflict and more unrest in a country,” said Mazaheri, an associate professor in the School of Arts and Sciences. “So, when we talk about the ‘resource curse,’ we can really talk about it in the political, social, and economic realms.”
Oil impacts almost everything—transportation, agriculture, international relations, and domestic politics, and countries that are dependent on oil for the majority of their wealth are unable to responsibly plan for development, given the nature of oil’s boom-and-bust cycles.
The solution is for oil-producing countries to develop economic diversification and entrepreneurship plans, said Mazaheri. Countries that are successfully beginning to overcome the paradox of oil wealth have begun investing in manufacturing, agriculture, and services.
Mazaheri will discuss all this and more in the February 7 webinar, which takes place from noon to 1 p.m. “A country’s geology isn’t its destiny,” he said. “It is possible, through the acts of individuals, leaders, and policymakers to escape the pitfalls of oil wealth.”