  Despite rapidly-expanding academic and policy interest in the links between
natural resource wealth and development failures (commonly referred to as the
resource curse) little attention has been devoted to the psychology behind the
phenomenon. Rent-seeking and excessive reliance on mineral revenues can be
attributed largely to social psychology. Mineral booms (whether due to the
discovery of mineral reserves or to the drastic rise in commodity prices) start
as positive income shocks that can subsequently evolve into influential and
expectation-changing public and media narratives; these lead consecutively to
unrealistic demands that favor immediate consumption of accrued mineral
revenues and to the postponement of productive investment. To our knowledge,
this paper is the first empirical analysis that tests hypotheses regarding the
psychological underpinnings of resource mismanagement in mineral-rich states.
Our study relies on an extensive personal survey (of 1977 respondents) carried
out in Almaty, Kazakhstan, between May and August 2018. We find empirical
support for a positive link between exposure to news and inflated expectations
regarding mineral availability, as well as evidence that the latter can
generate preferences for excessive consumption, and hence, rent-seeking.

General Economics;Economics