Council on Foreign Relations

In this Khaleej Times article, Amity Shlaes and Gaurav Tiwari discuss the foreign policy implications of the resource curse.  Comparing the experiences of Russia and India, they conclude with the following lesson: try to avoid being spoiled by oil, and remember that less is better.

Intuition tells us that oil-rich countries are not friendly to the United States, and that entreprenurial—or “smart”—countries are not endowed with oil. In this Center for Geoeconomic Studies Working Paper, the authors find a triangular relationship between oil wealth, entrepreneurial spirit, and friendliness to the United States. They confirm the idea that “oily” countries are not U.S.-friendly, in contrast to smart countries, which are friendly to the United States and do not have oil. The authors conclude that it is in the U.S. interest to support education and economic diversification in petro-states so those states can become more entrepreneurial and friendly.

In this YaleGlobal piece, Amity Shlaes and Gaurav Tiwari examine entrepreneurship and oil wealth in various countries and how these factors relate to a country’s policy towards the U.S.  They find that there is indeed a significant positive relationship between the pro-US votes and the level of enterprise in a country, and that countries with oil tend to be less entrepreneurial as well as less friendly to the US. It seems clear that the US would benefit not only from helping countries strengthen education, the rule of law and free trade, but also from supporting the entrepreneurial culture of any country where the US has an interest.