RESOURCE ABUNDANT COUNTRIES

Why do the resource abundant countries generally have a poor developmental and democratic record?

Why do the resource-abundant countries generally have a poor developmental and democratic record?

Introduction

Since the end of World War II, the world economy has been transformed from a devastated and fragmented assortment of national economies primarily engaged in producing a low level of basic commodities for local consumption into a unified set of product, factor, and financial markets of global dimensions generating a tremendous volume and variety of goods and services supporting a much higher level of living for the world's population. The combination of high population growth, a brisk pace in capital formation, ever widening markets, and accelerating technological advances led to a rapid rise in production with corresponding large-scale changes in productive structures and patterns of international trade. More than a half century after this transformation began, in the early years of a new millennium, the world economic landscape is markedly different from the scene of destruction, war weariness, and backwardness presented at the end of World War II, with a fully integrated group of prosperous, economically advanced countries tied closely to a group of developing countries rapidly modernizing their economies and, at a distance, mutually bound to a less integrated set of poorer and lagging countries divided by circumstance, culture, polity, and policy (Keane, 1988, 65).

This chapter reviews the changes that have taken place in the world economy during the second half of the twentieth century into the first decade of the twenty-first. It begins with a brief review of changes in the arrangements supporting world development during this period and the advances that have been made in lifting world incomes and improving levels of living of the world's population. It then focuses on the pace, pattern, and stability of world economic growth from 1950 to the present and notes that it slowed over time and became increasingly marked by disparities and instabilities. The discussion focuses on four characteristics of contemporary world development: the strong recovery in world production from the setbacks of two worldwide wars and the deep depression of the first half of the twentieth century, the rapid increase in international trade in the post-war period despite the widening imbalances and increased instability that now describe the international economy, the rapid initial pace of world growth followed by a marked slowdown in the expansion of world economic activity, and the marked differences in levels of living and growing disparity in individual country growth rates between higher income and lower income areas that describe recent decades. The chapter concludes by noting some challenges before the world economy in a new century (Gutmann, 2004, 111).

Discussion

The primary assumption of modernization theory is that there is one path to development, which consists of adopting the modern values, behaviours, technology, and institutions of developed countries. The focus of the modernization approach is thus to apply the so-called Western (Western Europe and the United States) development experience to the rest of the ...