Natural Capital, Resource Dependency, and Poverty in Developing Countries: The Problem of ‘Dualism within Dualism’

Abstract

Abstract There are currently two types of ‘dualism’ in patterns of resource use within developing countries that are relevant to the problem of resource degradation and poverty. The first ‘dualism’ concerns aggregate resource use and dependency within the global economy. The second ‘dualism’ concerns aggregate resource use and dependency within a developing economy. This ‘dualism within dualism’ pattern is symptomatic of a process of resource-based development, accompanied by substantial resource conversion, which often leads to benefits that are inequitably distributed. To reverse this ‘vicious cycle’, specific policies must be aimed at overcoming the structural features of ‘dualism within dualism’ in resource use patterns. Second, policies must also be introduced that improve the overall success of resource-based development that is accompanied by frontier land expansion. Specific policies include reform of land, tax, credit, and other economic policies that generally reinforce the dominance of wealthier households in natural resource and land markets, and promote the speculative investment in these resources as tax shelters.