Managing future oil revenues in Ghana: An assessment of alternative allocation options

Clemens Breisinger (), Xinshen Diao, Rainer Schweickert and Manfred Wiebelt ()

No 1518, Kiel Working Papers from Kiel Institute for the World Economy (IfW Kiel)

Abstract: Contemporary policy debates on the macroeconomics of resource booms often concentrate on the short-run Dutch disease effects of public expenditure ignoring the possible long-term effects of alternative revenue-allocation options and the supply-side impact of royalty-financed public investments. In a simple model applied here, the government decides the level and timing of spending out of resource rents. This model also considers productivity spillovers over time, which may exhibit a sector bias toward domestic production or exports. A dynamic computable general equilibrium model is used to simulate the effect of temporary oil revenue inflows to Ghana. The simulations show that beyond the short-run Dutch disease effects, the relationship between windfall profits, growth and households' welfare is less straightforward than what the simple model of the resource curse suggests. The CGE model results suggest that designing a rule to smoothing in and out of oil revenues between productivity enhancing investments and an oil fund is crucial to achieving both shared growth and macroeconomic stability.

Keywords: Oil fund; public expenditures; growth; productivity spillovers; Ghana; CGE analysis (search for similar items in EconPapers)
JEL-codes: H4 O5 (search for similar items in EconPapers)
Date: 2009
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/28346/1/599464844.PDF (application/pdf)

Related works:
Journal Article: Managing Future Oil Revenues in Ghana: An Assessment of Alternative Allocation Options (2010)
Working Paper: Managing future oil revenues in Ghana: An assessment of alternative allocation options (2009)
Working Paper: Managing future oil revenues in Ghana: An assessment of alternative allocation options (2009)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwkwp:1518

Access Statistics for this paper

More papers in Kiel Working Papers from Kiel Institute for the World Economy (IfW Kiel) Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().