March 11, 2012

Is there such a thing as a "resource curse?"

The popular idea of a "resource curse" is that having an abundance of some natural resource, such as oil, screws up your economy. 

For example, America had the lion's share of the exploited oil resources in the world from 1859-1945, and, thus, by 1945 the United States had collapsed to the point where it more or less ruled the world. 

Okay, well, maybe that's not the most convincing example. All right, gold was discovered in Northern California in 1848, making the largely unpopulated San Francisco Bay area suddenly wealthy. And that's why the Bay Area is so poor today. 

John Tierney wrote in 2008:
A report in Science argues that the “resource curse” theory is dubious because scholars (like Jeffrey Sachs and Andrew Warner) have been looking at the wrong data in studies showing that countries heavily dependent on exports of natural resources are exceptionally prone to slow economic growth, high rates of poverty, authoritarian rule, corruption and violent conflict. The easy money from natural resources, the curse theory went, helped finance civil wars and also weakened civil institutions by enabling repressive governments to buy off opponents and stay in power despite policies that stifled the rest of the economy. 
But the new report in Science argues that the causation goes in the opposite direction: The conflicts and bad policies created the heavy dependence on exports of natural resources. When a country’s chaos and economic policies scare off foreign investors and send local entrepreneurs abroad to look for better opportunities, the economy becomes skewed. Factories may close and businesses may flee, but petroleum and precious metals remain for the taking. Resource extraction becomes “the default sector” that still functions after other industries have come to a halt, according to the authors, C. N. Brunnschweiler of the Swiss Federal Institute of Technology and E.H. Bulte of the Oxford Center for the Study of Resource-Rich Economies. 
They find that the curse vanishes when they look not at the relative importance of resource exports in the economy but rather at a different measure: the relative abundance of natural resources in the ground. Using that variable to compare countries, they report that resource wealth correlates with slightly higher economic growth and slightly fewer armed conflicts. 

My guess is that having a lot of natural resources mostly means that when you screw up, you do it in a louder, more obnoxious fashion, with more attention paid to you. (Similarly, when you do succeed, like Texas did with oil, you do it more brashly.) Venezuela isn't a whole lot different from Guyana or Colombia or Ecuador, and Nigeria isn't that different from Cameroon or Benin. It's just that the countries with oil attract more publicity. People go around holding seminars to discuss why isn't Nigeria like Norway, but nobody is interested in the reasons why Togo is like Nigeria.

The reality is that there are a lot of boring poor countries with not much of either natural resources or human capital, and that normally nobody pays much attention to them. Occasionally, notice is paid to some place like Afghanistan or Yemen due to Al-Qaeda. In Yemen, the primary natural resource is that, most years, it rains. And then it turns out that Yemen, despite having practically nothing of anything, has managed to be, in its own impoverished fashion, extravagantly screwed up.

73 comments:

Anonymous said...

'Resource curse' is just a bunch of bull.
Look. All a nation, any nation, blessed with a super abundance of highly marketable and sought after natural resources needs to do is set up a sovereign wealth fund - it doesn't cost much to do, you just hire a team of the vey best and smartest fund managers - to invest the bounty in the income yielding, wealth creating production of other nations that did all the hard work and stil do the hard work in terms of 'peasants' paying water, gas or electriity bills for example.
So basically you become an uber-rentier buying up the capital of other people who need your resource - an make them work for you, whilst your wealth and capital holdings grow exponentially and the foreigners become more and more your debt slaves.
Simples.(As the meerkat put it).Basic, basic Economics 101.

But despite all that the stupid bastards still manage to screw it up.

eh said...

Norway owns lots of oil. So does Nigeria. An exercise for iSteve readers: compare and contrast vis-a-vis a 'resource curse'.

dearieme said...

I have a Norwegian friend who is very proud of how well his country has handled oil and gas wealth.

Henry Canaday said...

Resource Curse sounds a bit like the theory that England was hurt by not having all its factories destroyed, like lucky Japan and Germany, during World War II, which destruction allowed the latter to become world-beaters in industrial efficiency.

No. Having functioning factories, like having plentiful resources, merely facilitates self-destructive policies or a failure to remedy backward policies. Peoples and governments still have choices.

Glaivester said...

I believe that a major part of the "resource curse" theory is that the "cursed" countries don't show the same level of social progress for their per capita incomes that non-resource curse countries show.

The problem here, of course, is mixing up cause and effect, and assuming that the income level causes the social progress rather than the other way around - in the latter case, the obvious "curse" problem is simply that the resource rich countries have expanded their per capita income without going through the social progress that in less resource-y areas is necessary.

Basically, the assumption that is made is that not having the resources would allow their social progress to match their income, when in reality, their income level would simply fall to match their level of social progress.

peterike said...

"Resource curse" is just another attempt by white academics to find excuses for those ever-failing brown and black people.

Why don't we rename it the "Too Much of a Good Thing" curse? Or the "When God Hands You Lemonade, Make Lemons" curse?

And why do majority white nations never suffer from this, while majority non-white nations ALWAYS do? I guess oil and gold and minerals and timber are just racist.

Anonymous said...

These last two posts are GOLD!

Anonymous said...

Resource Curse belongs in the 'making excuses for black failure' school of thought. Just as NY TIMES and its ilk keep coming up with new theories to explain why black school performance lags those of other groups, guys like Jeffrey Sachs are in the business of explaining why African nations are poor. Since it's 'racist' to point to racial differences, they are grasping at straws. So, Sachs will say an African nation is cursed because it is landlocked. But then, he'll say another nation is cursed because it's along the coastline. He'll contradict himself on and on, but as long as he's finding excuses that blame everything or anything but blacks, he's the darling of the liberal community. And when it's not the resource curse, it's the history curse. So, we are told that the Rwandan Genocide is really to be blamed on Western racial theories. And when South Africa falls, we'll be told that it was due to the legacy of apartheid--never mind that other African nations are even worse off. (And Africa was the Dark Continent since the beginning of time, long long long before white men ever set foot on the continent. But Afro-centrists and stupid liberals like to pretend that it was some kind of Eden where even slavery was mild and humane.)

Jared Diamond says black Africa fell behind because it didn't have bulls, and Sachs says it's because some African nations have too many iron, diamond, and oil. (Diamond sure is full of bull.) Now, if resource abundance is a curse, why did Afrikaners build a great modern economy by digging for diamonds and gold?
And if resource abundance is a curse, how come oil-rich Norway is well off?
And does anyone think Russia would be better off without its vast resources?

And of course, there are plenty of African nations and provinces with few natural resources. Chad for example. So, why isn't Chad much of a success story? Following Sach's logic, it should be the Singapore or Switzerland of Africa since it's deficient in natural resources. I don't think there's a lot of resources in Niger either. Nor in Somalia. Nor in Egypt, a nation that produces very little oil and has lots of sand.

So, the resource curse theory isn't a theory at all but an excuse. Liberals keep needing such excuses because they are forbidden--and forbid the rest of us--to discuss issues of racial differences. Remember race is just a myth, and it can't have anything to do with why Africa is the way it is. And if you say different, just remember what happened to James Watson.

Anonymous said...

The REAL RESOURCE CURSE is that liberals and leftists have too many resources at hand to promote their ideas and prohibit countering views, and so, the liberal mindset on matters such as race and global warming has turned rotten, corrupt, morally supremacist, and stupid.

Since liberals know they're well-protected and respected no matter what kind of dumb theory they're coming up with next, they don't have to worry about the truth. As long as they stick to PC--whose main tenets are 'worship Negroes', 'worship gays', and 'worship Jews'--they can say the dumbest things and still be hired and promoted in universities and think thanks and government organizations as 'experts'.

Andrew Karnegie said...

Resource Curse sounds a bit like the theory that England was hurt by not having all its factories destroyed

Actually, I've heard this theory applied to the US. Either way, I'm not sure it's comparable. The argument is that US Steel had an interest in squeezing out the last value of its increasingly antiquated mills rather than making the huge expense of building new ones with the latest technology, whereas the Germans and Japanese didn't have any choice, since their old ones had been incinerated courtesy of the RAF/USAAF. So, while there was a "choice" for US Steel, the rational choice in the short term was untenable in the long term.

Not exactly the same thing as the choice of what to do with a sudden cornucopia in the form of exploiting newly found natural resources.

Anonymous said...

Resources can be a curse if there are stronger countries that want your resources and are willing to support friendly dictatorships. The examples in the 20th and 21st centuries are not slight, but would never occur to Thomas Friedman. There can also be civil wars from different groups fighting over resources.

Of course if you're internally secure like the US or Canada then having resources is a good thing.

Tyrone Jackson said...

In a history class, professor told us that environments profoundly affect their populations. For example, in a lush tropical forest filled with food-stuff, people don't have to struggle much for food. If ripened fruits are falling off trees and it's warm all year round(abundant in heat resource), you don't have to do much thinking. Instead, well-fed men prolly spend much time fighting one another for mating rights, which may be why among Hawaiians, men act like warriors and women shake their butts. It's like NFL gaming all yr round.

But in rougher climates, people are forced to be more creative. Some say Egyptian civilization, great as it was, became stagnant and conservative because of the steady and predictable flow of the Nile. Thus, Egyptians came to see the universe as orderly and run like clockwork. In contrast, the Euphrates and Tigris rivers were wild and unpredictable, and that may have made the people of the Near East more aggressive and hot tempered. And Greece was mostly rugged and poor in resources, and that forced Greeks to be inventive.

And it's been said by HBD folks that whites and Asians have higher IQs cuz had to survive for 1000s of yrs in resource-limited tundras of the North during the Ice Age. Under such ruthless conditions, men had less time to fighting over mating rights and women had less time/energy to be shaking their booties. Men had to learn to cooperate more and women had to be less funky. They all had to think more to create shelter and clothing. Also, they needed to hunt more since there was little vegetation.

But I'm not sure what applied to the past applies to today. There's huge difference between ripened fruits falling on your head under the warmth of the sun and having lots of gold/oil in the earth. One doesn't have to do much to eat bananas falling from trees but one has to do a lot to extract oil and gold. It requires lots of engineering and labor. Even if foreign companies are contracted to do that stuff, the natives have to run a modern government and financing and create/run a military, police force, education system, and etc, all of which are complex undertakings. So, there should be lots of taxing/challenging tasks for even nations with lots of natural resources.

Also, a nation has to maintain some degree of peace to attract foreign investment in the first place. There are lots of resource-rich areas in Africa that have failed to attract foreign investment because the inability of the people over there to run an orderly society. There are entire areas in Congo that are filled with all sorts of treasures, but for most foreign companies, they are no-go zones because of the excess of violence and such.

Anonymous said...

Nigeria is split almost evenly between Muslims and Christians.

Norway, not so much.

Brazilian said...

The "Resource Curse" theory as made to excuse third-world countries from their bad governance, economic mismanagement and educational failures.

If Japan had kept the rich in oil Sakhalin island after WWII would have damaged Japanese economy?

Anonymous said...

Why not consider this explanation:

Abundant per capita resources attract in-migration to the resource-rich area, causing it to no longer be abundant in per capita resources.

A territory that is wealthy by this measure will invariably lose such wealth if it fails to protect its borders.

Anonymous said...

America is blessed with super abundant per-capita resources.

And despite all that the stupid bastards still managed to screw it up.

--Same anonymous commenter who posted on abundant resources carrying the seeds of their own destruction if people don't bother to protect what they have.

Jim Bowery said...

To paraphrase Shakespeare: "The first thing we do, let's kill all the social scientists."

The main problem with the social "scientists" is that they place the rest of the population in a triple bind:

1) They don't conduct controlled experiments to tease causation from correlation.

2) They then don't compress their data sets to find the optimal model (the Kolmogorov Complexity of their data sets) which is the only alternative to controlled experiments to tease apart causation from correlation.

3) They refuse to admit that the prior double bind renders all statecraft a joke that denies that the most fundamental human right in civilized society with other humans is the right to assortatively migrate to mutually consenting human ecologies occupying territory of reasonably equal per capita value to those territories occupied by other human ecologies.

survivorship bias said...

There was a C-SPAN show many years back with Christopher Hitchens where either the interviewer or caller asked him to comment on American exceptionalism and he started musing mildly, "Well, I don't know about that, aside from the military stalemates with Canada or Mexico the place is made of lots of useful stuff in the middle, like coal..." before eventually agreeing with the questioner's Byronic premise.

internet publisher said...

The media-driven chase for intellectual novelty has taken professional sophistry to new heights. During the pre-Iraq war months how many highly touted experts admitted, "Honestly I have no idea wtf would happen" Nah, they always cited some doctor of fortune-telling at the Johns Hopkins center instead. I find this modern idiotic situation akin to some kind of curse but have no clue what to blame for it. Inspired by Friedman I shall hence invoke the "Gutenberg curse"

California kid said...

I believe the USA burned up most of its easily recoverable resources to fight WWII. In parts of Southern California, out in the rural farming areas, you can still see old rusting machines out in the fields. They look like they were used to pump and hold small amounts of oil out of the ground. I think the USA strip mined everything it could, leaving it dependent on foreign resources after the war, or a least a few years after.

Whenever I see this stuff, I feel like I'm looking at "old empire" remains. Like one of H. Beam Piper's SF novels. Some fantastical country existed in the past and built things we can only dream the purpose of and their rusting ruins is all that remains. Behold my works ye mighty...

Get Off My Lawn! said...

Isn't a big part of the problem total dependence on a single resource? What prompts countries to depend utterly on one commodity and fail to develop a sound, broad-based economic infrastructure that can weather ups and downs of the market, foster growth of education and the middle class, and cushion the blow as the resource dries up or is no longer needed?

Taking Steve's two examples: The US dominated world oil resources before WWII, but that was hardly our only source of wealth. California's boom was kicked off by the gold rush, but the state quickly developed other economic activities.

Are their any countries out there that are utterly dependent on a single resource (like Kuwait, but not like Norway, which was not exactly mired in desperate poverty before the oil boom and is probably not going to end up like Nauru when the oil runs out) and yet are fully functional, successful countries that one can imaging surviving past the end of the resource?

Lots of countries that depend heavily on resource extraction of one kind or another are pretty successful - Australia, for example - but these are usually big countries with many different resources. I can't think of a country that's dependent on a SINGLE resource that isn't either a basket case or living on borrowed time.

Brazilian said...

Anonymous: Nigeria is split almost evenly between Muslims and Christians.

Norway, not so much.

Brazilian: Norway is trying to correct this "problem"

Anonymous said...

Well America is soon going to end up with a population that looks more like that of Brazil with more natural resources than anyone imagined (people still haven't woken up to the amount of shale gas and shale oil out there). So someone's thesis will be provided right. Who knows which one?

Glaivester said...

Isn't a big part of the problem total dependence on a single resource?

Why are they so dependent? Would they actually be better off, ceteris paribus, without the resource?

What prompts countries to depend utterly on one commodity and fail to develop a sound, broad-based economic infrastructure that can weather ups and downs of the market, foster growth of education and the middle class, and cushion the blow as the resource dries up or is no longer needed?

Perhaps the fact that they got nothing else? All these supposedly "oil cursed" Arab and African countries - were they teeming with human potential before the oil was discovered? (And I mean since the industrial revolution).

TGGP said...

There has been a case of the supposed "resource curse" afflicting a high-functioning country. It gave rise to the term "Dutch disease". Other countries like Norway and now Canada deliberately structure their resource policies to avoid similar problems. And of course the Dutch don't seem that diseased nowadays.

jody said...

i've never heard of "resource curse" before. but it's total BS. i can say that with authority. there's only 2 ways to run an economy:

A) build stuff
or
B) pull stuff out of the ground

there used to be a third option, centuries ago, when humans were merely existing, and had year 1800 technology or whatever, and that was:

C) grow stuff

but that's not an option anymore.

now, which option you pick depends on
1) the average intelligence of people in your nation. are the people where you live smart enough for A?
2) luck. whether there's something in the ground underneath you to pull out. if there's nothing to pull out of the ground, option B is not an option for you.

combine these two factors, and you have a simple, real world explanation for how every economy on earth functions.

Ed said...

"The popular idea of a "resource curse" is that having an abundance of some natural resource, such as oil, screws up your economy. "

That may be the popular idea, especially judging from the preceding comments, but that is not really what is meant by the term. The idea is that having an abundance of some natural resource screws up your political system, which eventually screws up your economy.

Anonymous said...

off topic, chinese researchers say conformity in chinese, free thinking in brits hard wired::
http://www.dailymail.co.uk/news/article-2113350/Why-individualism-free-thinking-genes-British-people.html

jody said...

smart nations with stuff in the ground: they have AB economies. the US, canada, china, australia, the UK. can manufacture, or mine. obviously, they always choose to do both.

dumb nations with stuff in the ground: they have B economies. russia, south africa, saudi arabia, iran, mexico. generally can only mine. russia and south africa can manufacture, but only enough for domestic, no exports.

smart nations with nothing in the ground: they have A economies. no mining for you! try building stuff. this is the most difficult nation to run and requires the smartest people. germany, japan, france, south korea.

dumb nations with nothing in the ground: they default to C economies. nothing to mine, too dumb to build anything. they just grow stuff. plants and animals to feed themselves (if that), a few other things. their economies barely grow, and linearly, through sheer population growth. this is where the majority of nations in the world are.

only economies of type A or AB can grow geometrically. type B economies can boom, or bust, but they're dependent on commodity prices. type C just moves along at a sleepy pace.

i guess if you wanted to get technical, the netherlands is AC, and the US is ABC. the US and the netherlands grow SO much stuff, they can export in economically important volume. brazil is sort of ABC but their A is not very good.

Karen said...

There's also the possibility that countries like, say, England, the US, and Norway that use the abundant natural resources themselves benefit, while countries that simply export natural resources suffer. Texas' oil, frex, wasn't generally used in Texas, but was used to fuel cars and factories in other states in the same country. Venezuelan oil isn't being used to benefit Venezuela all that much.

Henry Canaday said...

"US Steel had an interest in squeezing out the last value of its increasingly antiquated mills rather than making the huge expense of building new ones with the latest technology"

US Steel and the other steelmakers were not making a competive return on investment, after taxes and inflation, partly due to union power. Otherwise the cash flow from those old mills would have helped fund the new ones, if these were economic investments at competive US labor and resource costs.

Anonymous said...

The ABC-type economy explanation above is helpful for understanding "resource curse." Basically, proponents of "resource curse" are saying that if countries like Nigeria and Congo had not been unfortunately blessed with abundant resources, then they would have better political systems in place.

Having better political systems in place, countries like Nigeria and Congo would then have become A-type ("build") countries. That is, they would be cranking out semiconductors, automobiles, and other advanced industrial goods.

tommy said...

I'm not too familiar with Warner, but has the acclaimed Jeffrey Sachs ever advanced any worthwhile thinking?

It seems we can never get to the bottom of anything because there is always another Sachs in the pipeline prepared to push his comfortable pet theories at the expense of truth. The effect is that we always have our eyes off the ball.

Anonymous said...

Despite this resource curse does anyone believe that a nation like Israel wouldn't give its left nut to be sitting on a pool of oil?

The answer to that question will probably tell you whether or not there really is such a curse.

Bébert said...

An article like this reaffirms my belief that there will never be any improvement in race relations. The only time race relations can improve, as we've seen in the past, is when people are candid about racial differences in ability. Without this principle, progressives will keep talking in circles and "conservatives" will keep stroking their chins thoughtfully and otherwise doing nothing, anything to avoid addressing the elephant in the room, which at this point is so large that one has trouble establishing where the live animal ends and the inanimate walls begin.

This system of enforced reticence concerning the real reason behind differences in outcome may change when whites are gone, but not for the reason that the more diverse among us think. Everyone assumes that whites are the barrier preventing colored achievement, and that their absence will spell the end of colored failure and thus the end of fraught discussions of race. No problem = no need for verboten speech, right?

The truth, however (and this is the great irony in colored support for progressivism), is less rosy. These enforced codes on "hate speech" and the like will cease to exist, not because racism will have ceased to exist, but because the new people in charge will be so (genuinely) racist, and so unsympathetic to colored excuses, that there will simply be no contrast in views (and thus no stratification of status associated with said views).

If coloreds knew they were being used as pawns whose day in the sun will end the moment their function as nuisances for whites is exhausted, they might vote differently. Or maybe not. Such wretchedness doesn't arise in a vacuum, after all.

But I digress. The point here is that whites are the only race (incidentally the most easily "duped, suckered, and swindled" as Céline observed) who are sympathetic to the excuses of their social inferiors. After them, there's no more sympathy. But at least there will be no more need for political correctness (because all its adherents will be dead)!

Anonymous said...

Jody,
You don't know what you are talking about.
The UK has virtually no manufacturing left - it has a massive trade deficit on manufactured goods.Just like the USA in fact.
Strangely enough, beore North Sea oil started running down, it masked the enormous trade deficit of the 1980s Thatcher disaster.

There is nothing I dislike more than dumb people who think they are 'smart'.
I prefer honest dummies.

Anonymous said...

These petroleum economies in the Middle East share the same structural weaknesses of the 'one crop' commodity based economies of the 19th century - like the American South. There's not a plethora of avenues to pursue for sustained growth. The Arabs are limited in what kinds of national economic models they can implement by this fact.

The economy of Egypt for example, would not suddenly become highly efficient and diversified if by miracle of history the average Egyptian IQ shot up 30 points overnight.

Anonymous said...

Resource Curse sounds a bit like the theory that England was hurt by not having all its factories destroyed, like lucky Japan and Germany, during World War II, which destruction allowed the latter to become world-beaters in industrial efficiency.

No. Having functioning factories, like having plentiful resources, merely facilitates self-destructive policies or a failure to remedy backward policies. Peoples and governments still have choices.


Of course, if the resource led countries hadn't had the resource, they might have made better choices. And England could have made better choices if their factories had been destroyed. It's unknowable - not a sure thing either way. There's no culture of choice which is independent of circumstances (like a kind of national free will).

Properly, we can't really say that resources are a curse or blessing, but it's a bit of a fiction to claim that a culture is everything, in the sense that we know Germany necessarily would've made the right choices had it's been left intact (to use this example).

But it's best to treat people as responsible, in terms of encouraging good behaviour. England should take responsibility for its industrial infrastructure, even if destruction of that infrastructure might have sent it down the path of Japan or Germany (or equally might not have), rather than it all being solely down to choice.

Anonymous said...

And why do majority white nations never suffer from this, while majority non-white nations ALWAYS do? I guess oil and gold and minerals and timber are just racist.

I think the Russians and Ukrainians have problems with their economies becoming weak and resource extraction based, at least.

Anonymous said...

The economy of Egypt for example, would not suddenly become highly efficient and diversified if by miracle of history the average Egyptian IQ shot up 30 points overnight.

Sure, it would probably take a decade or so.

Anonymous said...

To get rich i.e. increase per capita production you need to do increasing returns activities i.e. high tech manufacturing. Resource extraction is a decreasing returns activity.

Anonymous said...

(Unrelated topic)

Health and life span disparities are being reduced as Whites die younger.

"Study: Racial differences life expectancy
Smaller disparities often due to whites being shorter-lived than average."

http://www.jpost.com/Health/Article.aspx?id=261234

Steve Sailer said...

Thanks. Good off-topic alert. Interesting article.

PublicSphere said...

Let's talk about Botswana. Botswana has diamonds, a lack of ethnic conflict, blacks and a reasonably well-run government.

Hence, it's about as good as Panama, Bulgaria or Lebanon by measure of purchasing-power parity, depending on how you count.

http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_capita

If blacks are the problem, how come Botswana is so great?

Nathan Nunn argues that the slave trade did have a measurable effect on African economies: the previously less-enslaved peoples are still doing better today than the more heavily-enslaved ones.

http://nyudri.files.wordpress.com/2011/10/driwp55.pdf

beowulf said...

I guess it also makes a difference which American economist a country brings in to advise it.
For example, the useful counsel (diamond-rich) Botswana was given by Carleton College economist Stephen Lewis was excellent; the advice given to Russia by Jeffrey Sachs and his Harvard colleagues was terrible.

Anonymous said...

I can't believe that KK censored my post about them shiny translucent carbon resources.

Sheesh.

Brazilian said...

Most of the smart Russians and Ukrainians moved to the US and Israel.

Marc B said...

This is another excuse for why some nations lag behind without broaching the topic of racial or ethnic differences in intellect, temperament, diligence, and physicality. The same is being done with public education in the US because nobody in power dares bring up the single, most obvious trait that all of our "failing" schools have in common, which are their demographics.

Anonymous said...

Nigeria is split almost evenly between Muslims and Christians.

Norway, not so much.


See, right there Nigeria has another advantage over Norway - diversity!

Anonymous said...

"(Unrelated topic)

Health and life span disparities are being reduced as Whites die younger.

"Study: Racial differences life expectancy
Smaller disparities often due to whites being shorter-lived than average."

http://www.jpost.com/Health/Article.aspx?id=261234"

So in other words living near blacks lowers white life expectancies as well?

Get Off My Lawn! said...

Basically, proponents of "resource curse" are saying that if countries like Nigeria and Congo had not been unfortunately blessed with abundant resources, then they would have better political systems in place.

Do people really believe that, or do they just use it as a classroom exercise? I ask because it's so obviously untrue based on the fact that most other sub-Saharan countries have terrible political systems and yet also have no resources. It's true that, when extractable resources do exist in Africa - like diamonds in Sierra Leone or oil in Nigeria - they tend to lead to astonishing, almost Biblical, levels of violence and chaos, but those countries without such resources seem to do OK at screwing up, sometimes just as spectacularly (no major resources in Rwanda, for example).

Meanwhile, resource-rich Australia and Canada are doing pretty well. Resource-dependent Iran is not exactly paradise ... until you compare it to Nigeria. It takes more than a "resource curse" to destroy a country.

Brazilian said...

"Nathan Nunn argues that the slave trade did have a measurable effect on African economies: the previously less-enslaved peoples are still doing better today than the more heavily-enslaved ones."

That could explain Liberia situation, would be expected that a country founded by former American slaves would be the bright spot of Sub-Saharan Africa, but that not what really happened.

Instead we got General Butt-Naked.

Beecher Asbury said...

To anon who wrote, "So in other words living near blacks lowers white life expectancies as well?"

I have not yet digested that JPost article, but it did bring to mind this study from 2001 from Princeton, 'Mortality, Income Inequality, and Race in America'. In that report, they concluded:

In American cities and states, the fraction of the population that is black significantly affects white mortality rates.

2 page executive summary here
Full Report here

Anonymous said...

"Nathan Nunn argues that the slave trade did have a measurable effect on African economies: the previously less-enslaved peoples are still doing better today than the more heavily-enslaved ones."

I dunno. black americans seem to be doing better than africans.

Brazilian said...

"I dunno. black americans seem to be doing better than africans."

Beacause they live in AMERICA.

Matt said...

That could explain Liberia situation, would be expected that a country founded by former American slaves would be the bright spot of Sub-Saharan Africa, but that not what really happened.

Instead we got General Butt-Naked.


I figure Liberia's done about as well as Israel would if the Ashkenaz had had really no special cognitive or personality traits relative to the people they were interacting with, just a European culture and a typical Mid Eastern personality and IQ. (adjusted for the strengths of the Middle East relative to Africa).

By all accounts, the country (Liberia) actually did quite well, for an African country, until its American Slave descended elite were challenged by a military coup in the early 80s.

wiki on Liberia:

"Liberia is one of the world's poorest countries, with a formal employment rate of only 15%.[32] GDP per capita peaked in 1980 at US$496, when it was comparable to Egypt's.[41] "

wiki on Americo-Liberians:

"Americo-Liberians were credited for Liberia's largest and longest economic expansion

....

Although they make up only about 5% of the Liberian population, Americo-Liberians dominated national politics from its founding until Samuel Doe led a military coup in 1980.

There is controversy on how Americo-Liberians held on to power for so long. Some attribute it to the fact that divisions were based on "light-skin vs. dark skin" particularly because the first president was light skinned.

... observers point to the fact that during the Americo-Liberian reign the leaders were light, dark, and brown skinned meaning that theory is unlikely..."


My uninformed guess would be that the Americo-Liberians had a relatively large population early on, then by the 1980s began to run into demographic problems with the expansion of the "native" Liberian population, who ended up demanding a bigger piece of the pie (despite not having the Americo-Liberian economic ability, sparse as that may seem from a Western perspective). There's probably not a low trust story there, simply another market dominant minority story (feels weird to be describing African-Americans [more or less] as a market dominant minority, huh?).

I wonder if African-Americans would empathize with the Americo-Liberians (because they share a history and descent and both come from a "crushing" slave backgroud) or other Liberians (because the Americo-Liberians are supposedly a light skinned elite owing to their European admix).

Anonymous said...

Off the top of my head I believe the Russian and Ukrainian numbers are:

12k per capita and 4k per capita.

Russia exports resources but Ukraine doesn't. Although Russia does seem cursed, resources probably aren't the source of the problem. If Russia didn't have oil it would just be as poor as Ukraine, not in better shape.

Silver said...

PublicSphere,

Hence, it's about as good as Panama, Bulgaria or Lebanon by measure of purchasing-power parity, depending on how you count.

http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_capita

If blacks are the problem, how come Botswana is so great?


The difference is: Income inequality.

While none of the countries mentioned comes close to a, say, Sweden, income inequality is much less drastic than in Botswana. Bulgaria's income inequality has only recently increased, but it is still lower than America's. Lebanon's is not much different.
Panama's inequality is high -- standard fare for Latin America. Botswana's inequality, however, is significantly greater than even Panama's already depressing level.

This inequality drastically alters what the figure of PPP per capita GDP represents. Relying on that figure alone does not allow for an accurate comparison between the countries listed.

(To give you some idea: the income of the top 20% of earners in Bulgaria was some 4.5 times that of the bottom 20% in 2007; in Botswana it was twenty times. Someone earning four times as much as you is obviously (and enviably) richer, but his lifestyle isn't so different that you cannot relate to it at all (imo). Someone making twenty times as much as you, on the other hand, exists in an altogether different universe.)

Silver said...

PublicSphere,

"Nathan Nunn argues that the slave trade did have a measurable effect on African economies: the previously less-enslaved peoples are still doing better today than the more heavily-enslaved ones."

As a matter of fact, that is not what the study claims at all.

The finding was that the countries (actually, ethnicities) most affected by the slave trade exhibit lower trust levels than those less affected.

The study does not even attempt to link this to economic performance, however. That's just as well, since the countries most affected by slavery were those closest to the coast, yet these countries today generally do better economically than countries in the interior.

Beecher Asbury said...

I'd like to defend Russia and the other Eastern European nations a bit from some of the criticism directed at them from certain commenters.

Let's acknowledge the 70 plus years of marxist rule in Russia and 40 plus elsewhere in Eastern Europe.

Most commenters on this blog lament the massive social, political and demographic changes that have hit the US in the past 40 years. If 40 years of soft cultural marxism could mess up the USA this much, what on earth do you expect happened to the Russians and Eastern Europeans where the marxists had absolute hard power?

pdxr13 said...

"resource curse" is like being cursed to win PowerBall $380M or inherit 300x your annual earnings.

If you have half-a-brain and are even somewhat responsible, it will materially improve your life to get some windfall. If not, fast cars and cocaine will leave a young broke corpse, where once a financially-strapped stupid person muddled through.

Countries full of low impulse control people with low IQ can only hope for a high-control more-intelligent royalty class to dole out the goodies from oil/gold/uranium wealth. Norway funds a socialist State and depresses infant mortality to the lowest possible and funds education for everyone, even foreign predatory parasites. Saudi Arabia builds a population of useless people that can only be supported with high-tech desalinization, served by foreign workers.

I was in USAF technical training with Egyptian Officers (a Major and a Lt. Col) who would go home to train their people and run critical infrastructure. They were not that bright, addicted to road tar cigarettes, overly-friendly to my chubby wife, and got caught cheating on tests. If I did that, I would have been busted back to E-1 and fined all pay for 60 months while mowing lawns in a penal squadron. They got to re-take the test.

Egypt doesn't even have that much "windfall wealth" coming their way, beyond US Foreign Aid.

Luke Lea said...

Put your greatest hits sidebar back up.

Brazilian said...

There is studies that to free-markets to flourish is needed a high trust society.

Free markets started with the Northern European countries who engaged in overseas colonisation, Netherlands and Britain.

Propeller Island said...

Off the top of my head I believe the Russian and Ukrainian numbers are:

12k per capita and 4k per capita.

Russia exports resources but Ukraine doesn't.


Not so simple. Belarus has no resources but its GDP per capita is close to Russia and much higher than Ukraine. That differential between Russia and Belarus is probably the real measure of the boost Russia gets from its resources -- not nearly as much as everyone supposes.

The difference between Russia and Belarus on one side and Ukraine on the other is that the first two are highly industrialized and the last not so much. The industrialized part of Ukraine -- the Russian-speaking East -- is significantly richer than the rest of the country, which may as well be Moldova.

Anonymous said...

The assumption seems to be that there are these things - "resources" - which are innately good and wonderful.

In fact what makes something a resource is human ingenuity. Before people learned that iron ore could be used to make iron, and then all sorts of useful tools and weapons, iron ore was dirt. Not very good dirt.

Oil is a valuable resource because people have learned to make it one. Talk of resource-rich and resource-poor countries misses the point. There are people who make useful resources out of what was previously believed to be worthless rubbish, and there are people who don't. The difference is in the people, not the inanimate substances.

PublicSphere said...

Silver, thank you for the analysis. I was thinking of this Nathan Nunn paper - I think I found the wrong link before:

THE LONG-TERM EFFECTS OF AFRICA’S SLAVE TRADES
http://www.economics.harvard.edu/faculty/nunn/files/empirical_slavery.pdf

"I find a robust negative relationship between the number of slaves exported from a country and current economic performance. To better understand if the relationship is causal, I examine the historical evidence on selection into the slave trades and use instrumental variables. Together the evidence suggests that the slave trades had an adverse effect on economic development."

Silver said...

The assumption seems to be that there are these things - "resources" - which are innately good and wonderful.

In fact what makes something a resource is human ingenuity.


There's no contradiction there.

Oil is a resource because people want it in order to do things with it, things their ingenuity has invented. Some countries have more oil, others less. Those with more are typically well off because they can sell the resource off to those who want it.

Could it be that there could come a time in which what today are regarded "resources" become worthless, because people no longer have a use for them? Sure, there's always that possibility.

And could "new resources" be discovered, be it stuff that either today exists but no one has any use for, be it "new stuff" altogether? Again, yes.

It doesn't change the fact that, all else being equal, those countries with the stuff are better off than those without it.

Anonymous said...

'Brazilan said most of the smart Russians moved to the USA and Israel'.

If China wasn't buying Brazil's natural resources on a massive scale, Brazil would be scarcely better - just look what a horrible basket case Brazil was during the 1980s and 90s.

Anonymous said...

There is studies that to free-markets to flourish is needed a high trust society.

Free markets started with the Northern European countries who engaged in overseas colonisation, Netherlands and Britain.


What is needed is security and a willingness to obey the law, and to believe this is universally applicable, not really "trust" in the sense of trusting others to have your interests at heart beyond their legal obligations and trusting them not to lie to you beyond their legal obligation.

Obviously societies in which everyone is trying to steal from one another, in whether terms of any form of resources or people's persons are not going to have much of either security or willingness to obey the law. These are much more immediate concerns than "trust".

Anonymous said...

Oil is a resource because people want it in order to do things with it, things their ingenuity has invented. Some countries have more oil, others less.


The countries which currently "have more oil" are not the countries where the people who invented uses for oil came from.

Many "resource poor" countries are currently resource poor because the people there long ago figured out uses for stuff, so that today they have less of it. Oil in the US would be a good example - the US used to have a lot of it, but the US was the starting point for the oil business and has made serious inroads into its own supplys.

Countries which are "resource rich" today are usually countries with the other sort of people, the ones who never did and most likely never could discover uses for the stuff beneath their feet.

If Arabs had been the inventive ones, than today Arab oil stocks would be running dry and they'd be seeking out new supply in the backward countries - places like the US - where the backward natives had never learned to do anything with the black stuff which sometimes oozed from the ground.

Anonymous said...

"I dunno. black americans seem to be doing better than africans."

"Beacause they live in AMERICA."

Does that mean it be more beneficial to be descendant of slave than of a slave seller(like the black ones that sold other black ones to white ones)?

Anonymous said...

In Africa, all the slaves be caught and sold by black folks, so why not put the blame on them folks?

Anonymous said...

White folks didn't force black folks to catch and sell black folks. White folks bought them cuz black slaves be put up for sale by black folks, and blacks folks never done think it be wrong. Indeed, the slave trade wasn't ended cuz black folks in Africa were outraged by it but because white folks said enough be enough.