How vulnerable are countries to resource curse?: A multidimensional assessment

Abstract

This study aims to construct a composite index for measuring the vulnerability to resource curse in selected resource-rich countries through an analysis of the diverse factors, ranging from economic to governmental, social and political, that affect the resource curse phenomenon and its impacts. The proposed Resource Curse Vulnerability Index (RCVI) is based on 9 sub-indicators, namely government effectiveness, voice and accountability, political stability, rule of law, natural resources rent, GDP growth, human development level, transparency level and state fragility index. We perform the calculations and present the RCVI values of 55 countries in the time interval from 2005 to 2015. This study also provides an analysis of the RCVI values and rankings for the countries over the associated time interval. These results point to a clustering of the countries: A number of countries can be identified as low-RCVI countries that are principally not vulnerable to the resource curse, whereas a number of other countries are high-RCVI countries who suffer heavily from the resource curse. The more interesting group is the medium-RCVI countries that share geographical and cultural aspects with high-RCVI countries, however, have achieved substantially better performances, by taking appropriate steps to address their internal stability as well as economic situations.