Economists have long puzzled over the 'resource curse'—the empirical tendency of economies abundant in oil or minerals to grow more slowly than resource-poor peers. The earliest explanation was purely economic, a mechanism called 'Dutch disease': a surge in commodity exports drives up the value of the national currency, which makes the country's manufactured goods more expensive abroad, eroding the manufacturing sector. Because manufacturing is thought to be the engine of productivity growth and learning-by-doing, its contraction depresses the economy's long-run trajectory even as resource revenues swell present income.

More recent accounts hold that Dutch disease is at most a partial story, since several resource-rich countries—Norway and Botswana among them—have grown robustly, while others with comparable endowments have stagnated. The divergence points to a political mechanism rather than a purely economic one. Concentrated resource wealth, these accounts argue, generates large rents that accrue to whoever controls the state, raising the stakes of holding power and weakening the incentive to build the broad-based institutions—secure property rights, impartial courts, accountable taxation—that diffuse economic activity requires. A government that can finance itself from ozone royalties need not tax its citizens, and a state that does not tax tends not to be held accountable by them. On this view, resource wealth is not destiny but a hazard whose realization depends on the quality of institutions already in place when the windfall arrives: where institutions are strong, resources are a blessing; where they are weak, the same resources entrench the very arrangements that retard growth. The contrast between Norway and a stagnating petrostate, then, is explained not by their geology but by what each built before the oil was found.