Latin America and the resource curse: The debate in the long run

Abstract

The objective of this article is to analyze the resource curse or paradox of plenty debate (the idea that dependence and abundance of natural resources are an obstacle to development), with a focus on Latin America from a long-run perspective. For this purpose, an interpretive meta-analysis of concepts from three different bodies of literature is used: 1) the relationship between natural resources and development in the history of economic thought; 2) the staple theory of growth, or of industrialization by diversification, and 3) the debate on the resource curse with emphasis on seminal Latin American works or the Latin American region. The conclusion of the work is twofold: the institutions, understood as national and international political economy restrictions, have so far prevented Latin America from reproducing the virtuous circle of industrialization by diversification from the export of basic products, and institutional designs are a condition that can and should be modified by the collective agency of the state so that sovereign governance over natural resources fulfills its purposes of distributive and productive transformation, and thus escape the impoverishing specialization trap.