The Fiscal Management of Natural Resource Revenues in a Developing Country Setting (or How to Design a Fiscal Rule If You Are Not Norway)
The exhaustibility and volatility of natural resource revenues pose well-known economic challenges, of which those facing oil producers are the most prominent. If oil revenues represent an important share of export earnings and of government revenu...
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| Format: | Brief |
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World Bank, Washington, DC
2013
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| Online Access: | http://documents.worldbank.org/curated/en/2012/04/16838127/fiscal-management-natural-resource-revenues-developing-country-setting http://hdl.handle.net/10986/16178 |
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okr-10986-161782021-04-23T14:03:27Z The Fiscal Management of Natural Resource Revenues in a Developing Country Setting (or How to Design a Fiscal Rule If You Are Not Norway) Eckardt, Sebastian Sarsenov, Ilyas Thomas, Mark Roland AGGREGATE DEMAND ALL LIABILITIES BANKING SECTOR BONDHOLDERS BORROWING RATES BUDGET DEFICIT BUDGET SURPLUS BUSINESS CYCLE CAPACITY CONSTRAINTS CAPITAL MARKET CAPITAL MARKET DEVELOPMENT CASH TRANSFER COMMERCIAL BANKS COMMITMENT DEVICES COMMODITY COMMODITY EXPORT COMMODITY PRICES CONSUMER PRICE INDEX CONSUMPTION EXPENDITURE CORPORATE INCOME TAX CREDIBILITY CREDIT RATINGS CYCLICAL FISCAL POLICY DEBT DEBT ISSUANCE DEBT RULES DEBT SUSTAINABILITY DEFICIT RULES DEVELOPING COUNTRIES DEVELOPING COUNTRY DISCOUNT RATE DISCRETIONARY FISCAL POLICY DOMESTIC DEBT EQUILIBRIUM PRICE EQUITY OBJECTIVES EXCHANGE RATE EXPENDITURE EXPENDITURES EXPOSURE FINANCIAL ASSETS FINANCIAL CRISIS FINANCIAL MARKETS FINANCIAL RESOURCES FINANCIAL STATEMENTS FISCAL EXPANSION FISCAL FRAMEWORK FISCAL IMPACT FISCAL MANAGEMENT FISCAL POLICIES FISCAL POLICY FISCAL RULE FISCAL RULES FISCAL SAVINGS FISCAL STANCE FISCAL SUSTAINABILITY FIXED INVESTMENT FUND MANAGEMENT FUNGIBLE GOVERNMENT BORROWING GOVERNMENT CAPACITY GOVERNMENT DEBT GOVERNMENT REVENUE GOVERNMENT REVENUES GOVERNMENT SAVING GOVERNMENT SECURITIES GROSS DOMESTIC PRODUCT INCOME INCOME TAX INFLATION INSOLVENCY INSOLVENCY PROBLEMS INSTITUTIONAL CAPACITY INSTITUTIONAL ENVIRONMENT INSTITUTIONAL REFORM INTEREST RATE LIQUID DOMESTIC DEBT MARKETS LIQUIDITY LIQUIDITY CONSTRAINTS MARKET CONFIDENCE MIDDLE-INCOME COUNTRY MONETARY POLICY NATURAL RESOURCE NOMINAL YIELD OIL PRICE OIL RESERVES PENSION PENSION FUNDS PORTFOLIO PUBLIC PUBLIC BORROWING PUBLIC DEBT PUBLIC DEBT MANAGEMENT PUBLIC EXPENDITURES PUBLIC POLICY PUBLIC SAVINGS PUBLIC SPENDING RATE OF RETURN REPAYMENT RESERVE RETURN RISK-FREE RATE STRUCTURAL BUDGET BALANCE STRUCTURAL DEFICIT TAX TAX RATE TAX REFORM TAX REVENUES TAXATION TRACK RECORD TRANSACTION TRANSPARENCY TREASURY TREASURY BONDS VOLATILITY The exhaustibility and volatility of natural resource revenues pose well-known economic challenges, of which those facing oil producers are the most prominent. If oil revenues represent an important share of export earnings and of government revenues, then they can be part of overheating during booms and costly adjustments during downturns, making fiscal policy exacerbate volatility. At the same time, considerations of intergenerational equity suggest that fiscal policy should also preserve part of current oil revenues for future generations. To address both of these challenges, resource-rich countries commonly establish commodity funds, into which part of their resource-linked revenues are deposited and invested in income-generating assets (usually offshore financial assets). A key question in designing such funds is what share of current revenues should be spent and what share saved. Based on recent advisory services offered to the Ministry of Economy and Trade in Kazakhstan, this note summarizes one possible approach, aiming to provide rule-based anchors for sustainable fiscal policy in an oil-producing country. This approach applies traditional permanent-income and debt sustainability frameworks, but adapts the resulting recommendations to the institutional context of the country. Rule-based fiscal frameworks offer strong benefits to countries that are generating significant government revenue from extractive industries. As commitment devices, these frameworks can reinforce fiscally responsible economic management, contain volatility, and preserve fiscal savings for future generations. 2013-10-16T15:47:07Z 2013-10-16T15:47:07Z 2012-04 http://documents.worldbank.org/curated/en/2012/04/16838127/fiscal-management-natural-resource-revenues-developing-country-setting http://hdl.handle.net/10986/16178 English en_US PREM Notes;No. 164 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Brief Publications & Research |
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Digital Repository |
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Foreign Institution |
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Digital Repositories |
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World Bank Open Knowledge Repository |
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World Bank |
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English en_US |
| topic |
AGGREGATE DEMAND ALL LIABILITIES BANKING SECTOR BONDHOLDERS BORROWING RATES BUDGET DEFICIT BUDGET SURPLUS BUSINESS CYCLE CAPACITY CONSTRAINTS CAPITAL MARKET CAPITAL MARKET DEVELOPMENT CASH TRANSFER COMMERCIAL BANKS COMMITMENT DEVICES COMMODITY COMMODITY EXPORT COMMODITY PRICES CONSUMER PRICE INDEX CONSUMPTION EXPENDITURE CORPORATE INCOME TAX CREDIBILITY CREDIT RATINGS CYCLICAL FISCAL POLICY DEBT DEBT ISSUANCE DEBT RULES DEBT SUSTAINABILITY DEFICIT RULES DEVELOPING COUNTRIES DEVELOPING COUNTRY DISCOUNT RATE DISCRETIONARY FISCAL POLICY DOMESTIC DEBT EQUILIBRIUM PRICE EQUITY OBJECTIVES EXCHANGE RATE EXPENDITURE EXPENDITURES EXPOSURE FINANCIAL ASSETS FINANCIAL CRISIS FINANCIAL MARKETS FINANCIAL RESOURCES FINANCIAL STATEMENTS FISCAL EXPANSION FISCAL FRAMEWORK FISCAL IMPACT FISCAL MANAGEMENT FISCAL POLICIES FISCAL POLICY FISCAL RULE FISCAL RULES FISCAL SAVINGS FISCAL STANCE FISCAL SUSTAINABILITY FIXED INVESTMENT FUND MANAGEMENT FUNGIBLE GOVERNMENT BORROWING GOVERNMENT CAPACITY GOVERNMENT DEBT GOVERNMENT REVENUE GOVERNMENT REVENUES GOVERNMENT SAVING GOVERNMENT SECURITIES GROSS DOMESTIC PRODUCT INCOME INCOME TAX INFLATION INSOLVENCY INSOLVENCY PROBLEMS INSTITUTIONAL CAPACITY INSTITUTIONAL ENVIRONMENT INSTITUTIONAL REFORM INTEREST RATE LIQUID DOMESTIC DEBT MARKETS LIQUIDITY LIQUIDITY CONSTRAINTS MARKET CONFIDENCE MIDDLE-INCOME COUNTRY MONETARY POLICY NATURAL RESOURCE NOMINAL YIELD OIL PRICE OIL RESERVES PENSION PENSION FUNDS PORTFOLIO PUBLIC PUBLIC BORROWING PUBLIC DEBT PUBLIC DEBT MANAGEMENT PUBLIC EXPENDITURES PUBLIC POLICY PUBLIC SAVINGS PUBLIC SPENDING RATE OF RETURN REPAYMENT RESERVE RETURN RISK-FREE RATE STRUCTURAL BUDGET BALANCE STRUCTURAL DEFICIT TAX TAX RATE TAX REFORM TAX REVENUES TAXATION TRACK RECORD TRANSACTION TRANSPARENCY TREASURY TREASURY BONDS VOLATILITY |
| spellingShingle |
AGGREGATE DEMAND ALL LIABILITIES BANKING SECTOR BONDHOLDERS BORROWING RATES BUDGET DEFICIT BUDGET SURPLUS BUSINESS CYCLE CAPACITY CONSTRAINTS CAPITAL MARKET CAPITAL MARKET DEVELOPMENT CASH TRANSFER COMMERCIAL BANKS COMMITMENT DEVICES COMMODITY COMMODITY EXPORT COMMODITY PRICES CONSUMER PRICE INDEX CONSUMPTION EXPENDITURE CORPORATE INCOME TAX CREDIBILITY CREDIT RATINGS CYCLICAL FISCAL POLICY DEBT DEBT ISSUANCE DEBT RULES DEBT SUSTAINABILITY DEFICIT RULES DEVELOPING COUNTRIES DEVELOPING COUNTRY DISCOUNT RATE DISCRETIONARY FISCAL POLICY DOMESTIC DEBT EQUILIBRIUM PRICE EQUITY OBJECTIVES EXCHANGE RATE EXPENDITURE EXPENDITURES EXPOSURE FINANCIAL ASSETS FINANCIAL CRISIS FINANCIAL MARKETS FINANCIAL RESOURCES FINANCIAL STATEMENTS FISCAL EXPANSION FISCAL FRAMEWORK FISCAL IMPACT FISCAL MANAGEMENT FISCAL POLICIES FISCAL POLICY FISCAL RULE FISCAL RULES FISCAL SAVINGS FISCAL STANCE FISCAL SUSTAINABILITY FIXED INVESTMENT FUND MANAGEMENT FUNGIBLE GOVERNMENT BORROWING GOVERNMENT CAPACITY GOVERNMENT DEBT GOVERNMENT REVENUE GOVERNMENT REVENUES GOVERNMENT SAVING GOVERNMENT SECURITIES GROSS DOMESTIC PRODUCT INCOME INCOME TAX INFLATION INSOLVENCY INSOLVENCY PROBLEMS INSTITUTIONAL CAPACITY INSTITUTIONAL ENVIRONMENT INSTITUTIONAL REFORM INTEREST RATE LIQUID DOMESTIC DEBT MARKETS LIQUIDITY LIQUIDITY CONSTRAINTS MARKET CONFIDENCE MIDDLE-INCOME COUNTRY MONETARY POLICY NATURAL RESOURCE NOMINAL YIELD OIL PRICE OIL RESERVES PENSION PENSION FUNDS PORTFOLIO PUBLIC PUBLIC BORROWING PUBLIC DEBT PUBLIC DEBT MANAGEMENT PUBLIC EXPENDITURES PUBLIC POLICY PUBLIC SAVINGS PUBLIC SPENDING RATE OF RETURN REPAYMENT RESERVE RETURN RISK-FREE RATE STRUCTURAL BUDGET BALANCE STRUCTURAL DEFICIT TAX TAX RATE TAX REFORM TAX REVENUES TAXATION TRACK RECORD TRANSACTION TRANSPARENCY TREASURY TREASURY BONDS VOLATILITY Eckardt, Sebastian Sarsenov, Ilyas Thomas, Mark Roland The Fiscal Management of Natural Resource Revenues in a Developing Country Setting (or How to Design a Fiscal Rule If You Are Not Norway) |
| relation |
PREM Notes;No. 164 |
| description |
The exhaustibility and volatility of
natural resource revenues pose well-known economic
challenges, of which those facing oil producers are the most
prominent. If oil revenues represent an important share of
export earnings and of government revenues, then they can be
part of overheating during booms and costly adjustments
during downturns, making fiscal policy exacerbate
volatility. At the same time, considerations of
intergenerational equity suggest that fiscal policy should
also preserve part of current oil revenues for future
generations. To address both of these challenges,
resource-rich countries commonly establish commodity funds,
into which part of their resource-linked revenues are
deposited and invested in income-generating assets (usually
offshore financial assets). A key question in designing such
funds is what share of current revenues should be spent and
what share saved. Based on recent advisory services offered
to the Ministry of Economy and Trade in Kazakhstan, this
note summarizes one possible approach, aiming to provide
rule-based anchors for sustainable fiscal policy in an
oil-producing country. This approach applies traditional
permanent-income and debt sustainability frameworks, but
adapts the resulting recommendations to the institutional
context of the country. Rule-based fiscal frameworks offer
strong benefits to countries that are generating significant
government revenue from extractive industries. As commitment
devices, these frameworks can reinforce fiscally responsible
economic management, contain volatility, and preserve fiscal
savings for future generations. |
| format |
Publications & Research :: Brief |
| author |
Eckardt, Sebastian Sarsenov, Ilyas Thomas, Mark Roland |
| author_facet |
Eckardt, Sebastian Sarsenov, Ilyas Thomas, Mark Roland |
| author_sort |
Eckardt, Sebastian |
| title |
The Fiscal Management of Natural Resource Revenues in a Developing Country Setting (or How to Design a Fiscal Rule If You Are Not Norway) |
| title_short |
The Fiscal Management of Natural Resource Revenues in a Developing Country Setting (or How to Design a Fiscal Rule If You Are Not Norway) |
| title_full |
The Fiscal Management of Natural Resource Revenues in a Developing Country Setting (or How to Design a Fiscal Rule If You Are Not Norway) |
| title_fullStr |
The Fiscal Management of Natural Resource Revenues in a Developing Country Setting (or How to Design a Fiscal Rule If You Are Not Norway) |
| title_full_unstemmed |
The Fiscal Management of Natural Resource Revenues in a Developing Country Setting (or How to Design a Fiscal Rule If You Are Not Norway) |
| title_sort |
fiscal management of natural resource revenues in a developing country setting (or how to design a fiscal rule if you are not norway) |
| publisher |
World Bank, Washington, DC |
| publishDate |
2013 |
| url |
http://documents.worldbank.org/curated/en/2012/04/16838127/fiscal-management-natural-resource-revenues-developing-country-setting http://hdl.handle.net/10986/16178 |
| _version_ |
1764432407123984384 |