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Natural-Resource Funds: A Review

Author

Listed:
  • Alexander James

    (Department of Economics, University of Alaska Anchorage)

  • Timothy Retting

    (Department of Economics, University of Wyoming)

  • Jason Shogren

    (Department of Economics, University of Wyoming)

  • Brett Watson

    (Institute of Social and Economic Research, University of Alaska Anchorage)

  • Samuel Wills

    (Queen's College, University of Cambridge, Department of Economics, University of Sydney; Centre for Applied Macroeconomic Analysis, ANU.)

Abstract

Are natural resources a curse or a blessing? The answer may depend on how natural wealth is managed. By transforming a temporary windfall into a permanent stock in the form of a sovereign wealth fund, resource-rich states can avoid volatility and Dutch Disease effects, save for future generations, and invest locally. Herein we review the theory behind these resource funds, and explore the empirical evidence of their success. Our review is complemented by case studies that highlight some of the more nuanced features, behavior, and effects of resource funds. While the theoretical work highlights prescribing funds as remedies is situational, existing empirical work to complement these prescriptions is minimal. We discuss possible reasons for this, and in doing so highlight some of the challenges associated with empirical research in this area and discuss possible paths forward.

Suggested Citation

  • Alexander James & Timothy Retting & Jason Shogren & Brett Watson & Samuel Wills, 2021. "Natural-Resource Funds: A Review," Working Papers 2021-03, University of Alaska Anchorage, Department of Economics.
    • Handle: RePEc:ala:wpaper:2021-03
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    File URL: http://www.econpapers.uaa.alaska.edu/RePEC/ala/wpaper/ALA202103.pdf
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    More about this item

    Keywords

    Natural Resources; Sovereign Wealth Funds; Survey;
    All these keywords.

    JEL classification:

    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
    • Q33 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Resource Booms (Dutch Disease)
    • Q38 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Government Policy (includes OPEC Policy)
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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