Development
Commodity Trap (Resource Curse)
Definition
The paradox where countries rich in natural resources often have slower economic growth, more corruption, and weaker institutions than resource-poor countries.
Explanation
Also called the "resource curse" — resource wealth can crowd out manufacturing (Dutch Disease), fund patronage and corruption, reduce incentives for institutional reform, and create volatility as commodity prices swing. Nigeria, Venezuela, and many African oil states illustrate the trap. Norway and Botswana are notable exceptions.