RICHARD M. AUTY
In the final decades of the twentieth century, a counter-intuitive relationship emerged between natural resource abundance and economic development. Since the mid-1970s, the resource-poor countries have tended to grow significantly faster than the resource-abundant countries (Fig. 19.1). Although the larger resource-poor countries grew somewhat faster than the smaller resource-poor countries, the latter still easily outperformed all four categories of resource-abundant country (Table 2.3).
Significantly, among the resource-poor countries, those with the most constrained resource-endowment and smallest rent stream, the resource-poor countries of East Asia, sustained exceptionally rapid economic growth that was also relatively egalitarian and propelled them to the status of high middle-income countries in barely two generations. At the other extreme, the resource-abundant countries with the highest share of natural resource rents in GDP, the small oil-exporting countries, have exhibited least economic resilience. Nevertheless, most countries within each of the three other resource-abundant subcategories experienced a growth collapse after falling into a staple trap of growing dependence on commodities whose competitiveness was eroding. Even the larger resource-abundant countries did so, although they had the most favourable conditions for evading a staple trap. Subsequently, the pace of recovery from the growth collapses has been disappointing, even when the resource-abundant countries strongly embraced rapid economic reforms. This is especially so for the smaller and most rent-rich countries.
The underperformance of the resource-abundant countries is not inevitable however, because policy counts. Growth collapses occur if policies are adopted that retard competitive diversification so that the economy becomes locked into a staple trap. The economic development of a handful of small resource-abundant countries in differing cultural regions with differing permutations of natural resources (Malaysia, Thailand, Oman, Botswana, and Chile) supports this conclusion. So too does the historical