Analyzing the Resource Curse theory: A comparative study of Kazakhstan and Norway

Abstract: Many natural resources lead economies experience worse economic performance than their exports lead counterparts. This phenomenon is known as the Resource Curse, and many resource abundant countries face it. This study is aimed to critically assess existing Resource Curse theory by comparing two seemingly different cases Kazakhstan and Norway. Based on the Resource Curse theory hypothesis suggests that there are institutions related preconditions determining the presence or absence of the Resource Curse in natural resource abundant countries. To achieve the research aim and test the hypothesis the study reviews three major Resource Curse theory models: the Dutch Disease, Rent-seeking and Institutions models, and apply them to Kazakhstan and Norway. The empirical findings have revealed that oil production has quite similar effects on economies of Kazakhstan and Norway, and these findings cannot be fully explained by the Resource Curse theory.