Managing Resource Revenues: Lessons for low income countries
AbstractThis paper explores the choices faced by developing country governments that have received substantial revenues from natural resources. The economic principles underlying the choices between consumption, domestic investment, and the accumulation of foreign assets are analysed. The priority should be to use revenues to promote growth and investment in the domestic economy and thereby put consumption on a rapid growth path, although absorptive capacity may constrain the scope for doing this in the short run. Foreign asset accumulation should be used primarily to smooth volatility, rather than to build up a long-term sovereign wealth fund. Trade-offs between private and public spending channels are examined from both an economic and political economy standpoint.
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Bibliographic InfoPaper provided by Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford in its series OxCarre Working Papers with number 012.
Date of creation: 2008
Date of revision:
Exploitation; natural assets; natural resources; principal-agent framework; ownership rights; taxation; discovery process; extraction; renewability; signature bonuses; negotiated deals; auctions; absorptive capacity; foreign asset accumulation; volatility; sovereign wealth fund.;
Find related papers by JEL classification:
- E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
- F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
- O13 - Economic Development, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
- Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development
- Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
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- Milan Brahmbhatt & Otaviano Canuto, 2010. "Natural Resources and Development Strategy after the Crisis," World Bank Other Operational Studies 10212, The World Bank.
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