Evidence from a Natural Experiment on the Development Impact of Windfall Gains: The Camisea Fund in Peru
Heath Henderson and
Juan Jose Miranda
No 7520, IDB Publications (Working Papers) from Inter-American Development Bank
This document studies the economic effect of windfall gains by examining a Peruvian natural experiment. The Camisea Fund for Socioeconomic Development (FOCAM) is an inter-governmental fiscal transfer scheme that allocates natural gas royalties generated by the Camisea Gas Project to eligible subnational governments. We exploit the rules governing FOCAM allocation to identify the effect of the transfers on municipal accounts, local infrastructure, and economic development. Using a newly constructed district- level dataset for the years 2005 and 2012, we find evidence of positive impacts on municipal capital expenditures and local infrastructure. However, we also find evidence of a negative impact on municipal current expenditures. More specifically, we find that municipalities with low absorptive capacity coped with the increased administrative burden of FOCAM transfers by reallocating administrative effort toward (away from) executing capital (current) expenditures.
Keywords: Natural gas royalties; Municipal Expenditure; Local infrastructure (search for similar items in EconPapers)
JEL-codes: C14 H70 O10 O54 Q32 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
https://publications.iadb.org/publications/english ... sea-Fund-in-Peru.pdf (application/pdf)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:idb:brikps:7520
Access Statistics for this paper
More papers in IDB Publications (Working Papers) from Inter-American Development Bank Contact information at EDIRC.
Bibliographic data for series maintained by Felipe Herrera Library ().