Abstract
<jats:title>Abstract</jats:title> <jats:p>Following a large body of social science literature, this article traces the impact of natural resources on social policy via export-based socio-economic development. According to this literature, a resource boom creates many challenges for economic management and can lead to poor governance and corruption, thus potentially worsening socio-economic conditions. At the same time, the income generated from large-scale exports of natural resources provides opportunities for expansive social policies. Based on an original data set, we show that during most resource booms state social spending rises at least in line with GDP, which usually is a substantial rise. Accordingly, the rather poor performance of resource-rich countries as regards socio-economic indicators seems to be a result of strategic misuse of export earnings for political co-optation and because of administrative corruption, inefficient implementation, and poor targeting.</jats:p>