Paragraph Completion- The Resource Curse

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Paragraph Completion - The Resource Curse

Many countries with abundant natural resources seem to suffer from slower economic growth, more corruption, more conflict, more authoritarian politics and more poverty than their peers with fewer resources. Academics studying this oddity have worked out that the poor performance of these countries isn't only because powerful crooks siphon off money and stash it offshore, though that is also true. The startling idea that they have discovered is that money flowing from natural resources could make the people in these countries even worse off than if the riches had never been discovered.

  1. High corruption in these countries means that while the elite get very rich, their compatriots suffer extreme hardship.
  2. However, some mineral-rich countries, including Norway, admittedly seem to have escaped what the academics call as the resource curse.
  3. More money can make you poorer: this is also sometimes known as the Paradox of Poverty from Plenty.
  4. Prosperity of the elite in these countries causes sky-rocketing prices, which in turn adversely affects local industry and agriculture.

    • Correct Answer
      Choice C

    Detailed Solution

    The paragraph given explores a paradox : countries with abundant natural resources are worse off in terms of economic growth and poverty than those with fewer resources. Academics studying this oddity have discovered that money flowing from natural resources actually makes the people in these countries poorer than if the resources weren't discovered.

    Looking at the options, we see that option A talks of corruption and wealth inequality in resource-rich countries. These are ideas already discussed in the first line of the paragraph. The paragraph then moves on to describe what academics studying this have discovered. So, option A does not make sense as the last line of the paragraph.

    Option B talks of a tangential idea. That some mineral-rich countries have escaped the resource curse is something unrelated to what is discussed in the given paragraph.

    Option C seems to be a good option to complete the paragraph. The penultimate line talks of poverty that comes with the discovery of natural resources. Option C carries forward this idea, that more money (from resources) can actually make people poorer, and labels it the "Paradox of Poverty from PLenty".

    Option D also seems to be a possibility. D seems to offer an explanation as to why the country being resource-rich can make the people poorer: the prosperous rich drive up the prices and local industry and agriculture are adversely impacted by the sky-rocketing prices.

    Now, to choose between C and D, let us look at how the paragraph is structured. The paragraph presents the premise that resource-rich countries are often worse off than their peers with fewer resources. It describes what academics studying this oddity have discovered. The penultimate line talks of a "startling idea" that the academics have discovered. Option C gives a name for this idea/paradox, while D gives one possible reason for the wealth inequality. D doesn't conclude the paragraph as well as C. Option C fits better, as the focus of the paragraph is on the idea discovered by the academics.

    Correct Answer: Choice (C)

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