Managing Resource Revenues in Developing

Paul Collier, Anthony Venables, Frederick (Rick) van der Ploeg and A. Spence

No 15, OxCarre Working Papers from Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford

Abstract: This paper addresses the efficient management of natural resource revenues in capitalscarce developing economies. We depart from usual prescriptions based on the permanent income hypothesis and argue that capital-scarce countries should prioritise domestic investment. Since revenue streams are highly volatile governments should protect consumption from shocks by increasing it only cautiously. Volatility in domestic investment can be moderated by a buffer of international liquidity, but it is also important to structure investment processes to be able to cope efficiently with substantial fluctuations. To date, most of the resource-rich countries of Africa have not had investment rates commensurate with their rate of resource extraction.

Keywords: windfall revenue; permanent income; liquidity constraints; capital scarcity; buffer stovcks; volatility; commodity prices (search for similar items in EconPapers)
JEL-codes: D60 E21 E62 F34 H00 Q33 (search for similar items in EconPapers)
Date: 2009-01-27
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (34)

Downloads: (external link)
https://ora.ox.ac.uk/objects/uuid:b5c6d8f7-b919-4c22-b38e-a753fe2362af (text/html)

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:oxf:oxcrwp:015

Access Statistics for this paper

More papers in OxCarre Working Papers from Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford Contact information at EDIRC.
Bibliographic data for series maintained by Melis Boya ( this e-mail address is bad, please contact ).