Lashitew, Addisu A.Ross, Michael L.Werker, Eric2023-07-192023-07-192020-03-29World Bank Research Observer0257-3032 (print)1564-6971 (online)https://openknowledge.worldbank.org/handle/10986/40043The “resource curse” is often understood to imply poor growth in the non-resource sectors of the economy, but research into the diversification performance of resource-rich countries is limited. This paper surveys recent evidence and identifies empirical patterns in the economic diversification of resource-rich countries. Diversification is measured using the growth of per capita non-resource (manufacturing and services) sectors in domestic and export markets, which has a cleaner interpretation than competing measures. This measure is used to evaluate the long-term diversification of countries that started off as resource-dependent, and to rank countries according to their performance. We then identify policy-relevant correlates of diversification at the national level, including the acquisition of human capital, public and intellectual capital, and firm dynamism. More resource-dependent countries appear to perform worse on measures of human capital and intellectual capital, but more resource-abundant countries perform better on public capital and human capital accumulation. We examine the mechanisms behind diversification performance through in-depth case studies of Oman, Laos, and Indonesia, and conclude by identifying policy lessons and future research directions.en-USCC BY-NC-ND 3.0 IGODIVERSIFICATIONRESOURCE CURSECOMPETITIVE CAPABILITIESNON-RESOURCE SECTORSMANUFACTURINGSERVICESJournal ArticleWorld Bank10.1596/40043