Can discovering oil or diamonds make a country poorer?

Sometimes, yes, though economists now think the curse is conditional, not a law of nature.

The resource curse, also called the paradox of plenty, is the hypothesis that countries with an abundance of natural resources such as oil and minerals do worse on growth, democracy or development than countries with fewer. A 1995 study by Jeffrey Sachs and Andrew Warner found a strong correlation between resource abundance and poor growth.

One mechanism has a Dutch name. After the Netherlands discovered a huge natural gas field at Groningen in 1959, its currency appreciated as gas exports flowed, which harmed its ability to export other products. This is "Dutch disease". A second mechanism is volatility: oil rose from $10 a barrel in 1998 to $145 in 2008, then fell by more than half within months. Governments that live off such revenue, like Angola, where oil and diamonds made 99.3% of exports in 2005, struggle to plan. Venezuela's oil minister Juan Pablo Pérez Alfonzo foresaw trouble as early as 1976, saying that oil would bring ruin and calling it "the devil's excrement". A third mechanism is political: an autocrat with plentiful resource revenue need not rely on a productive population.

But the curse is not inevitable. Botswana's discovery of diamonds in 1967 transformed its economy, and partnerships with De Beers helped make it one of Africa's fastest-growing economies. Most experts believe the curse affects only certain countries under certain conditions.