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Institutional Change and State Capacity in Mineral-Rich Countries

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Mineral Rents and the Financing of Social Policy

Part of the book series: Social Policy in a Development Context ((SPDC))

Abstract

It is a widely held belief that countries will benefit from exploiting fuel and non-fuel mineral resources if they have ‘good institutions’, or at least if they are willing to build good institutions (Humphreys, Sachs and Stiglitz 2007). However, there is no shared definition regarding what good institutions actually are. The typical characteristics to which proponents have pointed include stable contracts, rule of law, electoral competition, no corruption and transparency in the management of resource revenue. Policy advisors have welcomed the focus on good institutions, because it has helped them to counter the hypothesis of the resource curse, which suggests that there is an inevitable negative relationship between mineral resources and development. Mineral-rich countries can use good institutions as a prophylaxis and a cure, just like travellers can use malaria tablets.

The author has received support from the UNRISD project Financing Social Policy in Mineral-Rich Countries and thanks UNRISD staff for their com- ments on earlier drafts.

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  1. Evelyn Dietsche
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    Katja Hujo (Research Coordinator in the Social Policy and Development Programme) (Research Coordinator in the Social Policy and Development Programme)

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Dietsche, E. (2012). Institutional Change and State Capacity in Mineral-Rich Countries. In: Hujo, K. (eds) Mineral Rents and the Financing of Social Policy. Social Policy in a Development Context. Palgrave Macmillan, London. https://doi.org/10.1057/9780230370913_5

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