Managing Future Oil Revenues in Ghana - An Assessment of Alternative Allocation Options
AbstractContemporary policy debates on the macroeconomics of resource booms often concentrate on the short-run Dutch disease effects of public expenditure ignoring the possible long-term effects of alternative revenue-allocation options and the supply-side impact of royalty-financed public investments. In a simple model applied here, the government decides the level and timing of spending out of resource rents. This model also considers productivity spillovers over time, which may exhibit a sector bias toward domestic production or exports. A dynamic computable general equilibrium model is used to simulate the effect of temporary oil revenue inflows to Ghana. The simulations show that beyond the short-run Dutch disease effects, the relationship between windfall profits, growth and households’ welfare is less straightforward than what the simple model of the "resource curse" suggests. The CGE model results suggest that designing a rule to smoothing in and out of oil revenues between productivity enhancing investments and an oil fund is crucial to achieving both shared growth and macroeconomic stability
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Bibliographic InfoPaper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 1518.
Length: 21 pages
Date of creation: May 2009
Date of revision:
oil fund; public expenditures; growth; productivity spillovers; Ghana; CGE analysis;
Other versions of this item:
- Clemens Breisinger & Xinshen Diao & Rainer Schweickert & Manfred Wiebelt, 2010. "Managing Future Oil Revenues in Ghana: An Assessment of Alternative Allocation Options," African Development Review, African Development Bank, vol. 22(2), pages 303-315.
- Breisinger, Clemens & Diao, Xinshen & Schweickert, Rainer & Wiebelt, Manfred, 2009. "Managing future oil revenues in Ghana: An assessment of alternative allocation options," IFPRI discussion papers 893, International Food Policy Research Institute (IFPRI).
- H4 - Public Economics - - Publicly Provided Goods
- O5 - Economic Development, Technological Change, and Growth - - Economywide Country Studies
This paper has been announced in the following NEP Reports:
- NEP-AFR-2009-05-23 (Africa)
- NEP-ALL-2009-05-23 (All new papers)
- NEP-CMP-2009-05-23 (Computational Economics)
- NEP-ENE-2009-05-23 (Energy Economics)
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- Kolavalli, Shashi & Robinson, Elizabeth J. Z. & Diao, Xinshen & Alpuerto, Vida & Folledo, Renato & Slavova, Mira & Ngeleza, Guyslain K. & Asante, Felix Ankomah, 2012. "Economic transformation in Ghana: Where will the path lead?," IFPRI discussion papers 1161, International Food Policy Research Institute (IFPRI).
- Wiebelt, Manfred & Pauw, Karl & Matovu, John Mary & Twimukye, Evarist & Benson, Todd, 2011.
"Managing future oil revenue in Uganda for agricultural development and poverty reduction: A CGE analysis of challenges and options,"
IFPRI discussion papers
1122, International Food Policy Research Institute (IFPRI).
- Manfred Wiebelt & Karl Pauw & John Mary Matovu & Evarist Twimukye & Todd Benson, 2011. "Managing Future Oil Revenues in Uganda for Agricultural Development and Poverty Reduction: A CGE Analysis of Challenges and Options," Kiel Working Papers 1696, Kiel Institute for the World Economy.
- Manfred Wiebelt & Rainer Schweickert & Clemens Breisinger & Marcus Böhme, 2011.
"Oil revenues for public investment in Africa: targeting urban or rural areas?,"
Review of World Economics (Weltwirtschaftliches Archiv),
Springer, vol. 147(4), pages 745-770, November.
- Marcus Böhme & Clemens Breisinger & Rainer Schweickert & Manfred Wiebelt, 2010. "Oil revenues for public investment in Africa: targeting urban or rural areas?," Kiel Working Papers 1623, Kiel Institute for the World Economy.
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