Economists often refer to the “natural resource curse,” by which they mean that large amounts of natural resources tend to create bad politics because as long as the oil keeps flowing, political leaders don’t need to care much about what goes on in the rest of the country.
a. Which one of the three factors of production do you think matters most to a leader of a resource-rich country? Why?
b. Which one of the five key institutions do you think matters most to a leader of a resource-rich republic? Why?