The Extractive Sector and Development in Latin America

Abstract

Abstract The ‘resource curse’ literature suggests that resource abundance, far from propelling development forward, might instead undermine it. Still, it is increasingly argued that with appropriately implemented governance frameworks, resource-rich countries might mitigate some of the negative externalities associated with natural-resource extraction. Focusing on Latin America, this chapter analyses the Extractive Industries Transparency Initiative (EITI) and its potential role in improving development outcomes arising from the operation of the extractive sector. The chapter shows that EITI membership in the region is growing, but it still remains limited and that progress among those countries that have joined has been slow. However, there are some unfolding contributions concerning the EITI’s practical development of transparency standards in Latin America, especially in Peru and Colombia. The chapter suggests that more progress of this nature will need to be made if the region is to realize fully the development potential of the natural resources sector.