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Authors

Paul Collier

Abstract

The international community assigns a high priority to helping impoverished

societies, yet its efforts are currently lopsided. While it spends around U.S. $

100 billion on aid and provides over 100,000 UN peacekeepers, to date it has

largely neglected the potential of international codes and laws to raise

standards of economic governance. This Essay analyzes the potential

contribution of such codes and laws to increase the development impact of

natural resource revenues. The current commodity booms make this a critical

opportunity for assistance. This Essay reviews the evidence on the resource

curse and its causes, including a prognosis for the long term consequences of

the present commodity booms, concluding that where behavior patterns to stay

unaltered the present booms would be a missed opportunity of quite

staggering proportions. The Essay then anatomizes the decision process by

which valuable natural resources in the territory of the society are harnessed

for economic growth that benefits the society, delineating five key decisions

and considering, for each, whether past failures were predominantly due to

mistakes or to misaligned incentives. Next, the Essay turns to the scope for

new international voluntary codes and discusses the potential need for new

laws, the national promulgation of which would be coordinated across the

OECD analogous to anti-bribery legislation. Such laws are difficult to

introduce and so are a last-resort approach for the realignment of incentives.

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