The deeply engrained yet rarely discussed legal principle of state ownership of natural resources is a primary contemporary driver of global poverty, conflict, poor governance, and undemocratic states. While there is now wide consensus on the existence of the natural resource curse - the phenomenon that developing countries with an abundance of natural resources tend to have slower economic growth, weaker democracies, and poor governance – there has been little progress in identifying its cure. Poor institutions are a strong contributing factor to the resource curse, but the conditions under which strong institutions are created is largely overlooked. Underpinning the weak institutions in most developing countries is a historical, structural legal condition of direct state ownership of all natural resources – termed the “resource state” - that creates a political environment for direct, central capture of resource-related rents and disincentives to protect individual and community land rights. This central control of resource rents then further erodes incentives to invest in weak institutions and accountable mechanisms of revenue generation, instead encouraging corruption and patronage, and low investment in human capital, which hampers economic growth and can foment internal conflict. When this theory is applied to include the prevailing policy of broad state ownership and/or control of land in developing countries, it also explains under-development, poor governance and inequality across the developing world. This article links theories on land and resource rights and the resource curse by examining recent literature, expanding the scope and identifying an inverse causal relationship for the resource curse, and proposing a bold, alternative global economic model to reverse the curse.