Academic Case Studies Useful For Answering Questions on the Natural Resource Curse

Botswana has 40% of GDP stemming from diamonds, is landlocked and has a predominantly tropical climate; all factors that by destiny could be assumed to make Botswana susceptible to the resource curse. However, it has actually sustained the highest rate of per capita growth in the world for the last 35 years (Acemoglu et al, 2002).

Acemoglu et al. suggest this economic success reflects the strength of the institutions in the country which have protected the property rights of investors, provided political stability, constrained the elites within a strong political system, and ensured the political participation of a broad cross section of society. Acemoglu et al. argue that the strength of Botswana’s institutions can be explained with reference to the country’s history. Botswana traditionally had tribal institutions which encouraged broad participation and restraint of elites, the peripheral status of Botswana in the British Empire meant that these tribal structures were not totally obliterated by the colonial structures. agriculture essay

It is possible to contrast Botswana, a country with traditional institutions able to overcome the resource curse, with Somalia where the traditional institutions are not sufficient to maintain political stability (Acemoglu et al. 2002).

Again, British colonial rule had limited effect on the structure on the Somali society. Although its economy is dominated by agriculture and so is not subject to the same resource curse as Botswana it illustrates the effect on an economy of having weak institutions, we could possibly assume that conditions in Somalia would be even worse if it did have a natural resource abundance. Somalia’s industrial sector, based on processing agricultural products, has mostly been looted and sold as scrap metal, it has no effective national government, and conflict is common (CIA Factbook). Clapham (1986) writes that Somali society was traditionally nomadic with intense conflict over available resources. These pre-existing tribal foundations to Somali society provide an unsuitable basis for government in which allocation of resources can occur without ethnic and cultural conflict.

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