Optimal Resource Rent
AbstractThis paper develops the first systematic attempt to model and empirically estimate the concept of optimal resource renting. Optimal rent is found to be positively affected by increases in the recession buffer and resource endowment, and negatively affected by the opportunity cost of hoarding. The model is then tested empirically on Norway, an oil-rich state, and actual renting is found to be systematically diverging from the optimal rent series. At least a third of the variation in actual renting is always left unexplained by the economic variables of the model, and should be attributed to the institutional and political factors that lie beyond the scope of our analysis.
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Bibliographic InfoPaper provided by William Davidson Institute at the University of Michigan in its series William Davidson Institute Working Papers Series with number wp1046.
Date of creation: 15 Mar 2013
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Rent-Seeking; Resources Policy; Public Finance;
Find related papers by JEL classification:
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- L71 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Mining, Extraction, and Refining: Hydrocarbon Fuels
- O17 - Economic Development, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-08-23 (All new papers)
- NEP-ENE-2013-08-23 (Energy Economics)
- NEP-POL-2013-08-23 (Positive Political Economics)
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