Wenar, L. (2007) ‘Property Rights and the Resource Curse’


Precept 7 states that resource revenues must foster continued high levels of domestic investment if those revenues are to promote sustainable and inclusive economic growth. This introduces the question of how those resource revenues ought to be used and consequently also of which generation has a right to those revenues. The paper considers ownership of resources and the distribution of resource revenues through dividends.


Wenar makes the case that the resource curse is fundamentally a result of a lack of property rights enforcement. Thus, slow growth, civil conflict and authoritarianism plague these countries. Wenar begins with the premise that each country’s people are the rightful owners of the country’s natural resources. This is often laid out in national constitutions and in international human rights treaties, yet it is often violated by authoritarian regimes or civil warriors. In considering how the benefits can be accrued by the rightful owners resource dividends are rejected as unfeasible due to a lack of incentives for doing so. Instead, existing treaties and accompanying institutions need to be employed to “bring all resource sales into the system of enforced market rules” (p. 3). This is achieved through applying two mechanisms. Firstly, litigation in the courts of the country from which the extraction companies originate. Secondly, by establishing an ‘anti-theft’ system operated by developed countries governments to punish countries which buy resources from a disqualified regime. 

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