A Dual-Track Development Strategy for Saudi Arabia

Abstract

An economic irony that is gaining increasing attention is the “resource curse” effect, whereby many of the poorest and most troubled states in the developing world have paradoxically the highest levels of natural wealth.1 In fact, a growing body of literature that suggests resource wealth itself, especially where it accounts for the bulk of government revenues as in the case of the so-called “rentier states,”2 may harm a country’s prospects for development. National growth data bear this out: rentier states with greater natural resource wealth tend to grow more slowly than their resource-poor counterparts.