(Kaieteur News) – The resource curse (also known as the paradox of plenty), according to the Natural Resource Governance Institute (NRGI) refers to the failure of many resource-rich countries to benefit fully from their natural resource wealth, and for governments in these countries to respond effectively to public welfare needs.

Citizens in resource-rich states often look forward to improved development outcomes after natural resources are discovered. These nations however tend to have higher rates of conflict and authoritarianism, and lower rates of economic stability and economic growth, compared to their non-resource-rich neighbors.

Political scientists and economists argue that oil, mineral and gas wealth is distinct from other types of wealth because of its large upfront costs, long production timeline, site-specific nature, scale (sometimes referred to as large rents), price and production volatility, non-renewable nature, and the secrecy of the industry. The following are some of the causes of the resource curse.