Oil Booms and Business Busts: Why resource wealth hurts entrepreneurs in the developing world, by Nimah Mazaheri.
224pp. Oxford University Press. £47.99 (US $74).
Dr David Cowan
The oil industry, prone to boom and bust cycles, is in one of its deepest ever downturns. While oil-rich nations such as Saudi Arabia and Iran – the two states studied in Nimah Mazaheri’s book – have survived these shocks in the past, things seem different this time. Deputy Crown Prince Mohammed bin Salman of Saudi Arabia believes the kingdom needs a “Thatcherite revolution”.
Economists have long pondered the paradox that resource-rich nations invest little in diversifying their economies; they call it the “resource curse”. Mazaheri applies this to Saudi Arabia and Iran and concludes that despite oil wealth these economies have failed to encourage entrepreneurs and small-to-medium sized enterprises (SMEs), and failed to build a relationship between government and what he calls “the non-elites”, the owners of SMEs. This has led to commonplace bribery, a lack of opportunities (especially for female entrepreneurs), and the inability of SMEs to…continue reading at TLS