1913 Intel

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Fool’s Gold

Posted by Matt in August 1st, 2007

You may not have noticed it, but Africa is booming. Yet just when the world’s poorest continent is finally starting to see real economic growth, the resource curse threatens to snatch it all away.

But the blessing of oil might turn out to be a curse in disguise. In a study published earlier this year, Paul Collier, a professor of economics at the University of Oxford and former director of development research at the World Bank, examined the historical relationships between commodity prices and economic growth in Africa to understand what the ongoing resource boom means for the world’s poorest continent. “Generally these increases in commodity price produce short-term effects that are positive,” says Collier. “And then the long-term effects are just dreadful.”

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