#62: The Resource Curse
English Learning for Curious Minds
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The More Natural Resources a Country Finds, the Poorer It Gets
Harvard economists found that the more gold a country found, the poorer it got. This is because when you sell something like oil or gold and any kind of mineral, you sell it in dollars. Because there are so many dollars coming into your country, this often causes inflation. It also makes exporting things less competitive, thereby hurting people who produce goods and sell them abroad. In most countries, the government collects money through taxes from its people - but if suddenly the government gets a huge new source of income from selling natural resources, then the income it gets from taxes becomes less important. And because it becomes less important, governments often become less accountable to the people they are supposed to govern.
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