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Natural resource curse versus Dutch disease: the explanatory primacy of New Developmentalism over the paradox of plenty

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  • Moraes, Isaias Albertin de

Abstract

This article reevaluates the two main explanatory approaches to the paradox of plenty: natural resource curse and Dutch disease. It is argued that the neo-institutionalism literature, while relevant for identifying political pathologies and rent capture incentives, operates predominantly at the level of effects rather than causes. The neoclassical model of Dutch disease, in turn, is limited to temporary price shocks. The article contends that Dutch disease, reformulated by New Developmentalism as an endogenous and chronic market coordination failure − anchored in Ricardian rents and multiple exchange rate equilibria − constitutes the structuring mechanism. The article proposes and formalizes a typology of models within the natural resource curse and Dutch disease theories.

Suggested Citation

  • Moraes, Isaias Albertin de, 2026. "Natural resource curse versus Dutch disease: the explanatory primacy of New Developmentalism over the paradox of plenty," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 46(2), pages 01-14.
    • Handle: RePEc:zbw:espost:342227
    DOI: 10.1590/3086-44612026-3805
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    1. Halvor Mehlum & Karl Moene & Ragnar Torvik, 2006. "Institutions and the Resource Curse," Economic Journal, Royal Economic Society, vol. 116(508), pages 1-20, January.
    2. Jeffrey D. Sachs & Andrew M. Warner, 1995. "Natural Resource Abundance and Economic Growth," NBER Working Papers 5398, National Bureau of Economic Research, Inc.
    3. Halvor Mehlum & Karl Moene & Ragnar Torvik, 2006. "Cursed by Resources or Institutions?," The World Economy, Wiley Blackwell, vol. 29(8), pages 1117-1131, August.
    4. Xavier Sala-i-Martin & Arvind Subramanian, 2013. "Addressing the Natural Resource Curse: An Illustration from Nigeria," Journal of African Economies, Centre for the Study of African Economies, vol. 22(4), pages 570-615, August.
    5. Collier, Paul & Goderis, Benedikt, 2012. "Commodity prices and growth: An empirical investigation," European Economic Review, Elsevier, vol. 56(6), pages 1241-1260.
    6. Haber, Stephen & Menaldo, Victor, 2011. "Do Natural Resources Fuel Authoritarianism? A Reappraisal of the Resource Curse," American Political Science Review, Cambridge University Press, vol. 105(1), pages 1-26, February.
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    Keywords

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    JEL classification:

    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State

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