Oil Wealth, Resource Curse and Development: Any Lessons for Ghana?

Abstract

Ghana’s new status as an oil-producing country has invigorated the scholarly debate on the resource curse theory, which assumes that countries with vast natural resource wealth like oil, diamond and gold are likely to experience slow economic growth and development as compared to countries with scarce natural resources. Although the development literature is well endowed with cases of countries with huge natural resources that have experienced slow economic growth, the literature is also clear on few other countries with enormous natural resources that continue to experience high economic growth due to strong political institutions and democratic practices. Norway and Botswana are two good examples. This paper employs the resource curse theory to examine the central research question of whether Ghana’s democratic institutions and governance practices can help the country escape the resource curse. While Ghana’s democratic institutions appear to provide a solid foundation for its new oil wealth, this paper argues that Ghana can only escape the resource curse if oil sector governance practices are accorded the same or higher attention as democratic governance practices. Clearly, the central argument by the authors to shift the debate toward oil sector governance is particularly important to the ongoing discourse on Ghana’s oil wealth.

Keywords: Ghana, resource curse, development, oil wealth