Formal models of the political resource curse

Abstract

By surveying formal models, I demonstrate that the political resource curse is the misallocation of revenues from natural resources and other windfall gains by political agents. I show that the curse always exists if political agents are rent-seeking, since mechanisms of government accountability, e.g. electoral competition, the presence of political challengers, and even the threat of violent conflict, are inherently imperfect. However, the scope for rent-seeking becomes more limited as the competition over political power that threatens the incumbent government becomes more intense.