The “resource curse” constitutes conventional wisdom among scholars of political economy. Countries with abundant natural resources such as oil and minerals turn out to be on average poorer, more corrupt, less democratic, and experience more intrastate violence. Yet, at closer inspection, the academic debate is more nuanced. While some scholars deny the very existence of the “curse” altogether, others argue that the harmful consequences depend on conditions such as the levels of abundance and dependency, the type of resource and extraction, the geographical location within countries, or resource governance. The latter represents the conceptual starting point of the book by John James Quinn. In short, his book argues that majority state ownership (MSO) of the resource sector (in Africa) is the critical condition that sets the “curse” in motion.
The book starts off with outlining the “resource curse” thesis and, also drawing on previous work, hypothesizes that state ownership constitutes the key variable why negative consequences materialize. The empirical part first performs a cross-sectional statistical analysis of 17 countries in sub-Saharan Africa that were major oil or mineral exporters from the early independence period through 2000. The analysis distinguishes the countries by their levels of MSO and plots these against 12 outcomes, usually associated with the “resource curse.” Ten outcomes are economic variables (e.g., growth, gross domestic product (GDP) per capita, foreign investment, debt, and real currency appreciation), but levels of democracy and intrastate armed conflict are included too. Using bivariate statistics with t-tests, the design approximates a quasi-experimental “most-similar systems design” (p. 32), as many contextual variables are similar in the sub-Saharan context. Results suggest that, partially except currency over-appreciation, countries with MSO had worse developmental policies and outcomes than the non-MSO countries (Chapter 2).
Chapter 3 performs paired comparisons of pertinent country cases. Comparing two oil-exporting countries with MSO, Angola and Nigeria, with the non-MSO cases, Cameroon and Gabon mostly support expectations. Chapter 4 applies the same procedure to mineral exporters. Also here, the non-MSO cases, Botswana and Niger, do better than MSO counterparts Democratic Republic of the Congo (DRC) and Zambia. As the primary period under investigation ends in 2000, Chapter 4 describes and discusses trends that emerged thereafter, including the accelerating growth rates in Africa, the emergence of transparency initiatives in the extractive sector, and the rise of China as an increasingly important economic actor in the region. The book concludes that there is substantial evidence for MSO harming resource exporting countries and hence strongly recommends not to adopt greater than 50 percent ownership of the resource sector.
There is much to be liked about this book. First, the popular variant of the “resource curse” can indeed use more nuance and contextualization. Second, state ownership theoretically makes sense as a critical condition. If state elites control the resource sector, they are more tempted and better positioned to use revenues for maintaining power rather than advancing the common good. Moreover, any student of African politics and political economy—like the reviewer—very much welcomes detailed analysis of the region, especially when results put negative, stereotypical findings into perspective and provide practical advice. Finally, the book demonstrates how to successfully apply a multi-method approach. While cross-sectional statistical analysis provides the big picture, more qualitative paired comparison digs deeper into the cases.
Turning to some more critical remarks, one may argue that the state ownership argument became an integrative part of the “resource curse” literature for quite some time. Erika Weinthal and Pauline Jones Luong made the argument already in 2006, including an empirical analysis (“Combating the Resource Curse: An Alternative Solution to Managing Mineral Wealth.,” Perspectives on Politics 4: 35–53). Therefore, one may say that the book mainly contributes an updated and more thorough empirical test for Africa.
More importantly, one misses a more thorough discussion of work rather fundamentally critical of the “resource curse” such as by Victor Menaldo or by Benjamin Smith. Even Michael L. Ross, the probably most prominent scholar in the “resource curse” literature, argues that the phenomenon materializes primarily in low- and middle-income countries and when states nationalize the resource sector.
Moreover, state ownership does not represent the only key condition. While (non-)MSO constituting a part of governance, the latter comprises more, not least corruption, clientelism or neopatrimonialism—depending on what of these interrelated concepts one prefers. In fact, we might deal with an “institutions curse” as argued by Menaldo (The Institutions Curse, Cambridge: Cambridge University Press 2016). Therefore, it would have been desirable to learn more about variation in institutions beyond (M)SO.
The actual level of abundance represents another critical condition. It remains one of the ambiguities of the “resource curse” literature that countries depending on resource exports are routinely labeled as “resource rich,” whereas related income potentials vary greatly. Indeed, countries like Botswana or Gabon are highly dependent but have much higher resource rents per capita and better outcomes than others like Niger, Nigeria, or Zambia. The latter countries earn little when normalized by population size. Studies like the one by Jack Paine in International Organization (“Rethinking the ‘Resource Curse’: How Oil Wealth Prevents Center-seeking Civil Wars,” International Organization, 70, 4: 727-61.2016) corroborate that governments with more per capita revenue have higher state capacity and thus enjoy more stability. Botswana exemplifies how ample per capita resource revenues combined with able governance leads to extraordinary growth rates, democracy, and peace.
While the book discusses some of these conditions, the analysis could have looked at such conditions more extensively, at least in the paired comparisons. Relatedly, it probably constitutes a methodological stretch to postulate that sub-Saharan Africa forms a most-similar system. An even superficial comparison of government policies in Botswana and the DRC reminds us that we cannot assume that governance beyond state ownership is alike in all the 17 countries. Beyond abundance and governance, we can think of other relevant differences such as location and extraction mode of the resources. Hence, in the end, an omitted variable bias persists. The results are consistent with the author’s expectation and plausible, but further studies still must rule out that other conditions matter more or interact with state ownership.
These more critical remarks must be put into perspective. Ideas to test further variables mostly refer to the political subtype of the “resource curse”—the book focuses on the original resource curse thesis by Richard Auty as well as Jeffrey D. Sachs and Andrew A. Warner and therefore concentrates on economic outcomes. Some of the methodological challenges point to opportunities for future research. John Quinn’s book represents valuable scholarly work and is highly recommend for students and scholars who want to learn more about the political economy of natural resources and African politics alike.
