The Rent Curse Natural Resources, Policy Choice, and Economic Development

The resource curse is a variant of a wider rent curse that can also be driven by geopolitical rent, regulatory rent, and labour rent. Total rent can therefore be from one-tenth to two-fifths of GDP and sometimes more. Rent is detached from the activity that generates it and is up for grabs so it feeds contents for its capture and its deployment can radically impact the development trajectory for better or worse, all too often for worse.

The Rent Curse: Natural Resources, Policy Choice, and Economic Development studies two rent driven models to suggest that low rent incentivizes the elite to grow the economy efficiently, whereas high rent encourages rent siphoning for immediate enrichment at the expense of long-term growth. It looks at low rent Mauritius and high rent Trinidad and Tobago to show that low rent stimulates rapid and relatively egalitarian economic growth with incremental democratization, whereas high rent inhibits competitive diversification and frequently causes protracted growth collapses. The post-war prioritization of industry has proved a double edged sword.

The Rent Curse employs rent driven models to explain why low rent East Asia has closed the income gap with advanced economies; why rent rich Latin America may be de-industrializing; why agricultural neglect launched sub-Saharan Africa on a false start to economic development; why South Asia pioneers growth through export services; and why governmenets in the oil-rich Gulf states raised the incomes of nationals without conferring the skills to sustain them.

Richard M Auty, Professor Emeritus in Economic Geography, Lancaster University, UK,Haydn I Furlonge, Adjunct Lecturer, Arthur Lok Jack Graduate School of Business, The University of the West Indies, Jamaica

Richard Auty is Professor Emeritus in Economic Geography at Lancaster University. He has advised many agencies on economic development issues, including the World Bank, EBRD, UNCTAD, IUCN, DFID, the US State Department, Chatham House and KIET. His research interests include resource-driven development, industrial policy and the political economy of development. He has taught at Dartmouth College and he has also been a visiting fellow at the Princeton University Research Program in Development Studies; Harvard Institute for International Development,; University of Sussex Institute for Development Studies; Resources for the Future; and UNU/WIDER.

Haydn Furlonge is a Chartered Engineer and Adjunct Lecturer at the University of the West Indies, Jamaica. He has held senior managerial roles in the energy sector in Brunei Darussalam and in Trinidad and Tobago. He has been an Associate Professor at the Natural Gas Research Programme at the University of Trinidad and Tobago and the University of the West Indies anda Consultant for the World Bank, UNDP, and IDB.

Part I: Context
1. Aims, approach, and structure of the study
2. Natural resources, country size and development: A review of the literature
Part II: Emergence of rent-dependent development
3. The rent-seeking legacy of the plantation economy in Trinidad and Tobago
4. The staple trap in high-rent Trinidad and Tobago
5. Low-rent Mauritius as a development counterfactual for high-rent Trinidad and Tobago
Part III: Differential rent-driven development in global regions
6. Agricultural neglect and retarded structural change in Sub-Saharan Africa
7. The evolving role of manufacturing in economic development
8. Prospective growth impacts of export services
Part IV: Analysing the role of rent in economic development
9. The principal findings and some policy implications