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Some countries are blessed with lots of oil, copper, diamonds and so on. Surely these countries should fare better than those which are not so lucky? In fact, the reverse is true. There appears to be a “resource curse” where resource-rich countries grow more slowly than resource-poor equivalents. So what is going on here?

Countries that enjoy large revenues from their natural resources must invest these in physical and human capital which will improve productivity in the general economy. If they spend the revenues on imported consumer goods or large “vanity” projects, there will be few long-term benefits.

The…

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