Advanced Search
MyIDEAS: Login to save this paper or follow this series

From Volatility to Stability in Expenditure: Stabilization Funds in Resource-Rich Countries

Contents:

Author Info

  • Naotaka Sugawara
Registered author(s):

    Abstract

    This paper examines the effect of stabilization funds on the volatility of government expenditure in resource-rich countries. Using a panel data set of 68 resource-rich countries over 1988–2012, the results find that the existence of stabilization funds contributes to smoothing government expenditure. The spending volatility in countries that have established such funds is found to be 13 percent lower in the main estimation, and similar impacts are found in robustness tests. The analysis also shows that political institutions and fiscal rules are significant factors in reducing the expenditure volatility, while highlighting the roles of the size of economy, diversified exports, real sector management, and financial markets.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www.imf.org/external/pubs/cat/longres.aspx?sk=41417
    Download Restriction: no

    Bibliographic Info

    Paper provided by International Monetary Fund in its series IMF Working Papers with number 14/43.

    as in new window
    Length: 49
    Date of creation: 12 Mar 2014
    Date of revision:
    Handle: RePEc:imf:imfwpa:14/43

    Contact details of provider:
    Postal: International Monetary Fund, Washington, DC USA
    Phone: (202) 623-7000
    Fax: (202) 623-4661
    Email:
    Web page: http://www.imf.org/external/pubind.htm
    More information through EDIRC

    Order Information:
    Web: http://www.imf.org/external/pubs/pubs/ord_info.htm

    Related research

    Keywords: Government expenditures; Natural resources; Fiscal policy; Fiscal stability; Economic models; stabilization fund; fiscal volatility; government expenditure; fiscal policy; institution;

    This paper has been announced in the following NEP Reports:

    References

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
    as in new window
    1. Beck, T.H.L. & Clarke, G. & Groff, A. & Keefer , P. & Walsh, P., 2001. "New tools in comparative political economy: The database of political institutions," Open Access publications from Tilburg University urn:nbn:nl:ui:12-3125517, Tilburg University.
    2. Acemoglu, Daron & Johnson, Simon & Robinson, James & Thaicharoen, Yunyong, 2003. "Institutional causes, macroeconomic symptoms: volatility, crises and growth," Journal of Monetary Economics, Elsevier, Elsevier, vol. 50(1), pages 49-123, January.
    3. Chinn,M.D. & Ito,H., 2005. "What matters for financial development? : capital controls, institutions, and interactions," Working papers, Wisconsin Madison - Social Systems 4, Wisconsin Madison - Social Systems.
    4. Joshua Aizenman & Reuven Glick, 2009. "Sovereign Wealth Funds: Stylized Facts about their Determinants and Governance," International Finance, Wiley Blackwell, Wiley Blackwell, vol. 12(3), pages 351-386, December.
    5. Bruno Merlevede & Koen Schoors & Bas Van Aarle, 2009. "Russia from Bust to Boom and Back: Oil Price, Dutch Disease and Stabilisation Fund," Comparative Economic Studies, Palgrave Macmillan, vol. 51(2), pages 213-241, June.
    6. Naazneen H. Barma & Kai Kaiser & Tuan Minh Le & Lorena Vinuela, 2012. "Rents to Riches? The Political Economy of Natural Resource-led Development," World Bank Publications, The World Bank, number 2381, August.
    7. Bruno Albuquerque, 2012. "Fiscal institutions and public spending volatility in Europe," Economic Bulletin and Financial Stability Report Articles, Banco de Portugal, Economics and Research Department, Banco de Portugal, Economics and Research Department.
    8. Mayer, Thierry & Zignago, Soledad, 2006. "Notes on CEPII’s distances measures," MPRA Paper 26469, University Library of Munich, Germany.
    9. Rabah Arezki & Markus Bruckner, 2011. "Oil Rents, Corruption, and State Stability: Evidence from Panel Data Regressions," School of Economics Working Papers, University of Adelaide, School of Economics 2011-07, University of Adelaide, School of Economics.
    10. Luca Agnello & Ricardo M. Sousa, 2009. "The Determinants of Public Deficit Volatility," NIPE Working Papers, NIPE - Universidade do Minho 11/2009, NIPE - Universidade do Minho.
    11. Balding, Christopher, 2012. "Sovereign Wealth Funds: The New Intersection of Money and Politics," OUP Catalogue, Oxford University Press, Oxford University Press, number 9780199842902, October.
    12. Witold Jerzy Henisz, 2004. "Political Institutions and Policy Volatility," Economics and Politics, Wiley Blackwell, Wiley Blackwell, vol. 16(1), pages 1-27, 03.
    13. Bjorvatn, Kjetil & Farzanegan, Mohammad Reza & Schneider, Friedrich, 2012. "Resource Curse and Power Balance: Evidence from Oil-Rich Countries," World Development, Elsevier, Elsevier, vol. 40(7), pages 1308-1316.
    14. Collier, Paul & Hoeffler, Anke, 2009. "Testing the neocon agenda: Democracy in resource-rich societies," European Economic Review, Elsevier, Elsevier, vol. 53(3), pages 293-308, April.
    15. Antonio Fatás & Ilian Mihov, 2003. "The Case For Restricting Fiscal Policy Discretion," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 118(4), pages 1419-1447, November.
    16. Frederick van der Ploeg, 2011. "Natural Resources: Curse or Blessing?," Journal of Economic Literature, American Economic Association, American Economic Association, vol. 49(2), pages 366-420, June.
    17. Edwin M. Truman, 2010. "Sovereign Wealth Funds: Threat or Salvation?," Peterson Institute Press: All Books, Peterson Institute for International Economics, Peterson Institute for International Economics, number 4983, July.
    18. Furceri, Davide & Karras, Georgios, 2007. "Country size and business cycle volatility: Scale really matters," Journal of the Japanese and International Economies, Elsevier, vol. 21(4), pages 424-434, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:imf:imfwpa:14/43. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jim Beardow) or (Hassan Zaidi).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.