Comment by opo

12 hours ago

>...This way of spending temporarily available resources on expanding the welfare state got a name: The Dutch Disease.

The term "Dutch Disease" is a bit more general than that:

>...The term was coined in 1977 by The Economist to describe the decline of the manufacturing sector in the Netherlands after the discovery of the large Groningen gas field in 1959.[1][2]

>The presumed mechanism is that while revenues increase in a growing sector (or inflows of foreign aid), the given economy's currency becomes stronger ("appreciates") compared to foreign currencies (manifested in the exchange rate). This results in the country's other exports becoming more expensive for other countries to buy, while imports become cheaper, rendering those sectors less competitive.

Ideally a temporary windfall should be used to invest in the future. Taking a temporary windfall and spending it on basically buying votes should have a name, but that isn't generally what the term Dutch Disease refers too.