Precision policies and local content targets in resource-rich developing countries: The case of the oil and gas sector in Mozambique

Marika Arena, Giovanni Azzone, Dell’Agostino, Laura and Francesco Scotti

Resources Policy, 2022, vol. 76, issue C

Abstract: This paper aims to understand whether and to what extent firm-level data can “precisely” support the definition of Local Content (LC) targets for international oil and gas companies in resource-rich developing countries. The paper addresses this topic with reference to a specific, publicly available dataset developed by the World Bank Enterprises Survey (ES) Unit and uses the case of Mozambique to demonstrate the informative potential of firm-level data for policy-making. Specifically, we compare the LC estimates obtained using firm-level data with those obtained using sector-level data (input-output tables). Based on this comparison, we demonstrate that firm-level data provide a more accurate representation of the capability of the domestic supply chain to provide inputs to the oil and gas industry, while input-output tables lead to a significant overestimation of LC. Overall, our findings suggest that firm-level data can provide a more precise basis for supporting the design of LC policies and the Enterprise Survey for Mozambique could represent a reference model for data collection to be extended to other resource-rich developing countries to support target definition.

Keywords: Precision policies; Firm-level data; Local content; Oil and gas; Mozambique (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jrpoli:v:76:y:2022:i:c:s0301420722000484

DOI: 10.1016/j.resourpol.2022.102597

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