Friday, October 17, 2008

Resource curse in Congo

Policy Innovations has a nice article about resource curse, weak government, and violence in the Democratic Republic of Congo (DRC):

The DRC's turmoil can be traced to the country's toxic combination of tempting mineral wealth, feeble government, vast size, and weak cohesion. This mixture turns the DRC's rich natural resource heritage into a poison that affects every aspect of its body politic.

Instead of acting as the country's economic engine, the plentiful deposits—including uranium, diamonds, and copper—have repeatedly fueled violent conflict and corruption. Local militia and foreign armies smuggle vast amounts out of the country—an estimated $400 million in diamonds and gold alone have been lost this way annually in recent years—while doing everything within their power to prevent a weak state from establishing its authority.

Barely connected to each other by meager transportation, communication, and institutional links, local groups have little reason to profess loyalty to an ineffective and distant state—and every incentive to seek enrichment at that state's expense. As a result, the country's history has been plagued by a zero-sum competition among mutually antagonistic cities, regions, and ethnic groups.

The author argues that traditional Western prescription-elections, economic reform, and administrative restructuring- of fixing conflict-prone countries is not going to work. He recommends three institutional innovations:

  1. Multinational natural resource companies could play a greater role in protecting major mineral sites and providing services to citizens.Although many people might recoil at this idea, major international corporations have the strongest management capacity in the country and—under the right contractual arrangement—could have the greatest incentive to ensure that the state's mineral wealth be used to improve the lives of the DRC's people.
  2. Instead of attempting to build the DRC along the lines of the Western model of top-down governance, the international community should be advocating a far more horizontal model. The main governing structures would be shaped around cities and their surrounding rural areas, with programs built from the ground up. A looser, more horizontal governing structure, in which power and responsibility flowed from large municipalities upward and outward would make individual units far more effective, especially if outside assistance focused on improving their management, transparency, and accountability.
  3. International donors could improve government performance if they focused more on designing systems that would keep local officials responsible to their constituents. Elections alone will not dramatically improve how government operates—especially elections for leaders in distant cities who have little influence on local programs (the international community spent more than $500 million on national elections