The resource curse theory - the impact of globalisation on resource-rich countries’ resource curse vulnerability

Abstract

Despite the substantial body of knowledge concerning the resource curse theory, the impact of globalisation has been overlooked. The study provides insights into the relationship between a country’s resource curse vulnerability and globalisation. A quantitative approach was used along with secondary data to determine the effect of globalisation on countries’ resource vulnerability index (RCVI). The dynamic models provided no significant results for RCVI and overall globalisation, while the static model revealed a significant and inverse correlation. Similarly, the subdimensions of social and political globalisation displayed a negative relationship with RCVI. In contrast, there was a positive relationship between economic globalisation and RCVI. Consequently, both social and political globalisation can lead to greater transparency, accountability, and improved governance, mitigating the effects of the resource curse by promoting higher diffusion of norms and ideas and a higher level of international cooperation, treaties and organisations encouraging institutional and policy reforms. Decision-makers and policymakers can leverage the research to mitigate resourcerich countries’ susceptibility to the resource curse and establish more diversified economies through effective policies and strong institutions. Future research should consider the de facto and de jure subdimensions of the globalisation index, including financial, trade, interpersonal, cultural and informational globalisation