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Resource Funds: Stabilizing, Parking, and Inter-Generational Transfer

Anthony Venables () and Samuel Wills ()

No 171, OxCarre Working Papers from Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford

Abstract: The paper explores strategies for managing revenue from natural resources, focusing on the balance between domestic and foreign asset accumulation. It suggests that domestic asset accumulation is the priority in developing countries, while there are three motives for accumulating foreign assets; inter-generational transfer, temporary ‘parking’ of funds, and stabilisation. The paper argues that the first of these is inappropriate for low income countries. The second is required if it is difficult to absorb extra spending in the domestic economy and takes time to build up domestic investment. The third is important, and depends on the extent to which the economy has other ways of adjusting to shocks.

Keywords: resource curse; managing windfalls; fiscal rules; volatility; absorptive capacity; Dutch disease; public investment (search for similar items in EconPapers)
JEL-codes: E60 F34 F35 F43 H21 H63 O11 Q33 (search for similar items in EconPapers)
Date: 2016-04-13
New Economics Papers: this item is included in nep-mac
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Persistent link: https://EconPapers.repec.org/RePEc:oxf:oxcrwp:171

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