IDSD01Y3 Study Guide - Midterm Guide: Capital Flight, Decolonization, Affirmative Action
30 Dec 2015
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The natural resource trap refers to the phenomenon that the more resources a country has, the worse off they are. This trap occurs because resources invite corruption & the quality of a regions government is diminished. An elite bolivian family owned all the tin in nigeria, despite this title, no one truly owned it, & it lead to grievances, violence, & war. The natural resource trap makes countries dependant on the revenue from the resource. But the revenue from these resources are always volatile. Countries abandon their existing and often primary industries (agriculture & manufacturing) because their focus shifts entirely to exploiting the new resource economy. This destroys mature industries leaving the countries with no plan b to fall back on/return to when the resource revenue runs dry. Costa rica: the historical coffee industry that created widespread employment & wealth was destroyed by the discovery of minerals.
