The enormous potential that responsible management, oversight, and stewardship of natural resources can yield for uplifting people out of poverty and contributing to sustainable development has long been recognized. However, translating those resources into actual benefits in practice has been more elusive, and today two-thirds of the world’s poorest people live in countries that in fact are rich in natural resources.
The ill effects of the resource curse can be attributed in part to the absence of transparent and accountable institutions in many Resource Rich Developing Countries (RRDCs). In these RRDCs, large monetary windfalls and unregulated inflows of funds into government treasuries have created incentives for considerable corruption, which in the long-run gravely undermines the relationship between citizens and governments. I