Actually, Tim owes John Christensen an apology

Thinking about this last post a little bit more, the more and more I think Tim is very, very wrong.

The problem with developing countries finding resources is that it becomes very easy for whoever controls the resources, usually the only thing in the country capable of beign exchanged for foreign currency, can control the country and set the rules of the game in their favour. This is usually very bad for economic growth.

That doesn’t sound too dissimilar to the position Finance has found itself in since the 1980s in the UK and US. Finance is immensely profitable and those that control financial firms seem capable of controlling the institutions of the countries in which they operate setting rules – with regard to barriers to entry, bailouts, taxation – in ways which suit incumbent rich people.

The Finance Curse doesn’t operate to anything like the degree the Resource Curse operates in poorly run, poor countries. Perhaps Finance handicap is better.

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