Natural-Resource Funds: A Review

Alexander James, Timothy Retting, Jason Shogren, Brett Watson and Samuel Wills
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Timothy Retting: Department of Economics, University of Wyoming
Brett Watson: Institute of Social and Economic Research, University of Alaska Anchorage

No 2021-03, Working Papers from University of Alaska Anchorage, Department of Economics

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.

Keywords: Natural Resources; Sovereign Wealth Funds; Survey (search for similar items in EconPapers)
JEL-codes: Q32 Q33 Q38 Q43 Q48 (search for similar items in EconPapers)
Date: 2021-11
New Economics Papers: this item is included in nep-ene and nep-env
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Persistent link: https://EconPapers.repec.org/RePEc:ala:wpaper:2021-03

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