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Maybe, but they look like two separate problems to me. Russia's is a "resource curse": http://en.wikipedia.org/wiki/Resource_curse http://en.wikipedia.org/wiki
by timiscool999 15y ago
Maybe, but they look like two separate problems to me.
Russia's is a "resource curse": http://en.wikipedia.org/wiki/Resource_curse http://en.wikipedia.org/wiki/Resource_curse
Our current financial system looks more like a twist on a "rent seekers": http://en.wikipedia.org/wiki/Rent_seeking http://en.wikipedia.org/wiki/Rent_seeking
They're kind of similar, but only because resource curse countries end up with a bunch of rent seekers and corrupt officials.
- dredmorbius 15y agoI've got to mull this one over a bit. After several decades of study, I'm just starting to really grok money and finance. Notable WRT resources curse / Dutch disease is the Norwegian counterexample: http://ideas.repec.org/p/ssb/dispap/377.html http://ideas.repec.org/p/ssb/dispap/377.html
- bh42222 15y agoNorway had a strong law and order foundation before they hit oil.
- gwern 15y agoTrue, but the article the other day on Norway said that they squandered the oil up until the 1970s? when they brought in a foreigner to advise them on how to set up their current successful system. The law and order helped them recover from their mistakes, yes, but it didn't stop them from making them and if the oil had run out before they recovered...?
- dredmorbius 15y agoSo ... finance definitely has a rent-seeking component, having reviewed some of the literature. But it also has the effect of starving other fields of talent and technical expertise, of bidding up their costs, and related effects which are more similar to Dutch Disease / Resource Curse. The number of physics, maths, and engineering grads working at banks / financial institutions rather than at science / product R&D firms, for example, is pretty staggering. Still mulling, but thanks for the food for thought.