To benefit from plenty: Lessons from Chile and Norway

It might seem obvious discovering an asset such as oil or copper would be wonderful news for the country making the find. Yet the opposite is often true. The windfall can bring poverty, civil strife, corruption, inequality, slower growth and undemocratic practices. The phenomenon is known as the resource curse. This study of the paradox of plenty looks at the actions that can be taken to ensure that underground assets are used to bring overall benefits to the host country. Two complementary countries that have escaped the resource curse and prospered are examined in detail. Norway found oil and grew rich thanks to policy decisions and institutions that used the discovery wisely. Chile has vast deposits of copper and a very different history but also managed to avoid the pitfall of excessive reliance on it.