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Economic diversification encourages growth and development as it redirects economic activity away from reliance on a primary product or a few resource-based industries. In resource-rich countries, the “resource curse” or Dutch disease often manifests itself in the form of corruption, weak institutions, and misaligned currency values as a result of poor management of economic rents derived from the natural resource. The rent-seeking behavior, weak institutional frameworks, and poor governance create the perfect conditions to brood corruption, stymie the development of modern mixed economics, and perpetuate poverty. This chapter examines how natural resource dependence led to the institutionalization of corruption in Trinidad and Tobago, a symptom of the Dutch disease, which in turn had a negative effect on diversification efforts and continues to be an impediment to diversification. |
