Bargaining to lose: a permeability approach to post-transition resource extraction

This chapter presents a new model of the resource curse, which is one of the greatest challenges facing developing nations today. Numerous cases of oil- and mineral-rich states stunted by civil war, large-scale corruption, hyperinflation, and limited state capacity illustrate a tragic situation, where the wealth concentrated beneath the surface has not transformed itself into wealth in the hands of the citizenry. In order to answer the question as to what prevents the development of this large set of resource-rich post-colonial states, I develop a theoretical framework in which to study this question by conducting a comparative analysis of the post-transition development of the mining industries in Zambia and Mongolia – two developing states with significant mineral wealth (specifically copper) that experienced a massive exogenous economic (as well as political) shock in the early 1990s, and that subsequently have undergone similar processes impacting their permeability and thereby, I claim, their political and economic development. The purpose of this chapter is to use these two comparable but varying cases to deduce a basic theory of resource-driven underdevelopment. I find that a lack of scholarship on the relationship between governments and external actors has led to under-theorization of the role of permeability in national politics and has led to theorists overlooking the impact on democratic accountability (and therefore on many other development outcomes) of “permeation.â€