3
Chad had less governmental capacity than Cameroon to begin with; Chad will receive the
vast majority of revenues from the project and hence the vast majority of the benefits or
problems those revenues bring; and Chad has been and remains the World Bank’s main
focus in terms of its capacity-building efforts which are designed to ameliorate the effects
of the resource curse.
The next section of the paper provides some background information on the
resource curse thesis and why one might expect Chad to be at high risk. The third section
provides information on the basic features and design of the Chad-Cameroon pipeline
project. The core of the paper follows in the next section which is an evaluation of the
pipeline project’s various successes and/or failures to date. The last section summarizes
the argument and draws out the longer-term conclusions one can reach from this case
study on the prospects for resource-led development in poor countries.
2. The Resource Curse and Chad
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The basic question behind the resource curse thesis is quite simple: why do so
many resource-rich countries that are diverse in so many ways (population size, type of
government, religion, ethnicity, etc.) end up producing such dismal economic and
political results? In this study, we consider six different aspects of the resource curse.
The “Dutch Disease” and poor economic performance
Much of the resource curse literature focuses on the crowding-out economic logic
of the “Dutch Disease.” The phrase “Dutch Disease” was originally coined to explain the
negative effects that North Sea oil revenues had on Dutch industrial production.
Essentially, the Dutch Disease refers to “the appreciation of a country’s exchange rate
(especially appreciation of the country’s currency) caused by large foreign exchange
Convention