The Oil Curse
I asked the following question on one of my economics exams: You are the leader of a country that is trying to economically develop. Your head geologist bursts into your office with the news that he has just found a huge pool of oil. He hasn’t told anyone. What do you do? The answer: Shoot him. Why? Because relying on the export of oil or mineral wealth has been more of a curse than a benefit. Recent history shows relying on raw material exports retards, not promotes, economic development, political change towards democracy, and social change toward tolerance and equality. The cautionary tale from history is Spain. In 1492 Spain was finally (after over a 400 year crusade) united under a Catholic government. Much of Spain's educated elite, minority groups of Muslims and Jews, were persecuted by the Inquisition and forced to leave Spain and later Portugal (enriching Holland). But a lucky bet on Columbus led to immense mineral wealth, mostly silver, from Spanish Ame...