Natural Resources, Global Power Relations, and Economic Development: Insights from Mongolia
Natural Resources, Global Power Relations, and Economic Development: Insights from Mongolia

Summary/Abstract: This article explores the resource curse phenomenon in the Global South, using Mongolia as an example. Mainstream economists and international financial institutions typically attribute the failure to convert resource wealth into prosperity to domestic institutional deficiencies, such as corruption and a weak rule of law. This study challenges this dominant institutional approach by shifting the analytical focus from local pathologies to the transnational context. Drawing on Critical Political Economy, specifically the Murdoch School, it argues that the regulatory frameworks governing mining, often referred to as 'modes of governance', are frequently products of global relations of power. These frameworks are designed to align with the accumulation strategies of foreign investors rather than national development goals. The article begins by reviewing the literature on the relationship between natural resource abundance and economic growth. Second, it interrogates the prevailing governance models by highlighting the structural asymmetries and power dynamics that shape extractive industries. Finally, the empirical analysis of Mongolia demonstrates how external pressure, debt dependency, and the imposition of neoliberal norms constrain state sovereignty. Ultimately, the paper concludes that 'good governance' reforms can perpetuate an 'institutional trap,' facilitating the extraction of surplus by foreign actors while limiting the developmental capacity of resource-rich nations.

• Details
• Contents