Avoiding the Political Resource Curse: Evidence from a Most-Likely Case

Abstract

Why do some countries escape the political resource curse while others do not? Most scholars argue that avoiding the claimed anti-democratic effects of natural resources, especially oil, largely depends on the quality of pre-existing political institutions and/or the effectiveness of contemporary resource management institutions. Drawing on the most-likely case of Timor-Leste, one of the world’s most oil-dependent countries that nevertheless successfully consolidated democracy, we challenge these dominant theories and highlight new important factors to consider. We show that Timor-Leste did not avoid the curse because of good pre-existing political institutions, good natural resource governance institutions, or an otherwise favorable environment for democracy. Instead, we find that the ideological beliefs of major political actors, their strong popular legitimacy, the absence of a hegemonic actor among them, as well as the approaches of external actors, have produced a consolidated democracy despite strong incentives for the development of authoritarianism. These findings highlight the importance of ideology and agency, of the composition of independence movements, and of constructive international engagement, in particular at critical historical junctures. In short, even countries facing serious political and economic challenges can avoid the political resource curse, and both scholars and policymakers should consider a broader approach to the phenomenon.