Is the “Resource Curse” a Curse?
December 15th, 2017
After finishing my 800th article about the economic impact of the extraction industry in the West, I’ve come to the conclusion that the “resource curse” is not a curse – unless a community lets it become one.
Economists say that the “resource curse” is a “paradox of plenty” because they have shown that over the long-run, areas that are rich in natural resources tend to grow slower than areas that don’t have them. While the numbers may prove this to be true generally, it’s important to not assign blame for slow growth on the resource itself. Consider the examples of Park City and Eureka City – both had abundant resources, one made the strategic shift.
The greatest thing to have in the world is options – even when they create headaches. Complaining about the presence of a natural resource is like complaining about your Home Depot shopping list to a homeless man.
Sustainable communities are those that structure themselves in a way that the users of public resources and services “pay their own way”. This can only happen when a community takes the time to really understand the costs that come with the resource development. The transaction costs of extracting oil from the Uintah Basin are high on their roadways, but they can be addressed with a current transportation plan. The opportunity costs of Roosevelt’s oil-related service companies include a community gateway that today seems to preclude anything but more industrial development, but this can be mitigated with things like design guidelines.
At the end of the day, it’s hard to argue whether resources are a good or bad thing. The fact is that the resource is a THING that just needs to be managed strategically. The real conversation should be about how to convert the gains from a fluctuating industry into sectors that are not tied to extraction.