Policy responses to the COVID-19 pandemic: Another case of “resource curse”?

Stella Tsani and Wee Chian Koh

Energy Policy, 2024, vol. 195, issue C

Abstract: This paper examines the COVID-19 policy responses with focus on resource abundance and the role of policy tools, like oil-based Sovereign Wealth Funds, employed in resource-rich countries to support fiscal responses to the pandemic. Panel data on a sample of 217 countries for the period 2019–2020 are used. Quantile regression analysis is employed to obtain a nuanced understanding of the identified relationships which goes beyond mean links. Empirical results show that resource-rich countries, and hydrocarbon rich-countries in particular, record smaller fiscal responses to the pandemic as compared to resource-poor countries. This holds true even for countries that operate Sovereign Wealth Funds. Results are consistent under different model specifications, policy response measures (fiscal, on-budget), resource-abundance variables, whole- and sub-sample, at the mean and different quantile levels. The findings confirm another case of the “resource curse” manifested through weaker fiscal stimulus in resource-rich countries as compared to resource-poor countries. This calls for policy considerations in resource-rich countries to better prepare against future shocks and to carefully consider in this process the role of explicit policy tools they may employ.

Keywords: Sovereign Wealth Fund; Resource curse; COVID-19; Policy response; Resource-rich countries; Fiscal policy (search for similar items in EconPapers)
JEL-codes: D02 E62 Q01 Q38 Q4 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S030142152400394X
Full text for ScienceDirect subscribers only

Related works:
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:eee:enepol:v:195:y:2024:i:c:s030142152400394x

DOI: 10.1016/j.enpol.2024.114374

Access Statistics for this article

Energy Policy is currently edited by N. France

More articles in Energy Policy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().