The Natural Resource Trap

In recent weeks, our class has been discussing the various aspects of conservation and how different actors (states, NGOs, indigenous peoples) view it, feel about it, and treat it as an issue in today’s world. While reading and talking about state governments using conservation as a way of achieving different goals, and the corruption we see around the world, I could not help but think about the concept of natural resource traps, which I learned about in a class last semester on the international political economy.

In Paul Collier’s book, The Bottom Billion, he analyzes the poorest billion people in the world, the countries they reside in and the common traits among those countries.  These countries are not developing - they are stagnant or even moving backwards. He claims there are several different ‘traps,’ or situations these countries are in that prevent positive progress from happening. One of these traps is the natural resource trap.

About 29% of the worlds one billion poorest people live in resource-rich countries (Collier 2007). There are several theories as to why an abundance of natural resources cause most countries to experience a reduction in growth, but Collier finds one particularly important: the issue of governance.

According to collected data, autocracies experience greater growth than democracies in a situation of surplus natural resource revenues. However, in regards to bottom billion countries specifically, it is an entirely different case, and this is because many resource-rich, low-income countries are ethnically diverse. In the case of most autocracies existing in a diverse country, rulers depend on the support of their own ethnic group. The more diverse the country is, the narrower his support group will be, and the more likely he is to sacrifice the economic growth of his country in order to redistribute wealth into his support group.

It seems intuitive that a transition to a democratic political system would solve the problem of autocratic misspending, but it is not that simple. Big natural resource revenues weaken political checks and balances. One reason for this is because a government with a lot of revenue has no need to heavily tax the public, which provides little encouragement of the public to pay attention to how their taxes are being spent. If there are few or no political restraints (checks and balances,) then patronage politics, or politics based on bribery, is likely to occur. Rational, corrupt politicians will spend their money on “buying community leaders,” because electorate loyalty to ethnic communities is strong in bottom billion countries (Collier 2007). Similar to autocracies in resource-rich societies, the more ethnically diverse the country, the worse the democracy will perform. This allows for political patronage to run rampant, with large amounts of revenue from natural resources available for corruption and bribery, and a democratic system that attracts cronies. In order for a resource-rich, ethnically diverse bottom billion country to encounter economic growth, strong political restraints need to be in effect – this is very rare. Most democracies develop strong, balanced institutions as their economy develops, but these low-income countries that have a boom of natural resource revenue are trapped in a stagnant autocracy or failing democracy, lacking the political restraints to ensure proper growth, and in turn lacking the growth to ensure political improvement.

While Collier’s is concerned specifically with non-developing countries, this theory can be applied to developing ones as well, for many of them have rampant corruption. In class, we wondered aloud if Kenya’s government was corrupt, and if that could be why there is such conflict surrounding the conservation movement, the tourism industry, the state, and the local tribes. At first glance, in looking at the Politics of Kenya Wikipedia page, it appears as if Kenya has a democracy not unlike our own. They have an executive branch, a legislative branch, and a judicial branch. The president is elected for a five-year term, there are political parties, and counties are represented by elected officials. However, in reading further, one can see that corruption and conflict certainly exist. As recently as 2008, there was widespread violence after the announcement of a president following what was believed to be rigged elections. Thousands died, hundreds of thousands were displaced, and some scholars note that land disputes between ethnic groups were also violently settled at the same time ("The Politics of Kenya," Wikipedia).

Kenya is rich in many resources in addition to their wildlife. Could this be why corruption seems to surround the conservation movement taking place there, or at least one of the reasons? What came first, the corruption or the natural wealth?

Sources:

Collier, Paul. The Bottom Billion: Why the Poorest Countries are Failing and What Can Be Done About It. New York, New York: Oxford University Press. 2007.

"The Politics of Kenya" on Wikipedia