An econometric study on the classification and effectiveness of natural resource funds

Hiroyuki Taguchi () and Javkhlan Ganbayar

MPRA Paper from University Library of Munich, Germany

Abstract: This article aims to examine the effectiveness of natural resource funds in resource-rich countries according to the funds’ objectives by an econometric method using panel data. This study’s contribution is to demonstrate fund-specific evaluation: the study classifies the funds into three kinds by their objectives: stabilization fund, investment fund and saving fund, and then evaluates each fund’s effectiveness by each criteria corresponding to each objective. The econometric estimations identified the effectiveness of stabilization fund in reducing the volatility of government expenditure and primary balance and the effectiveness of investment fund in raising investment rate. They also confirmed the facilitation of the fund’s effectiveness under the combination between the fund’s operation and high governance. The econometric study further found that the operation of stabilization fund reduces the volatility of government expenditure by 13.6 percent and its operation with high governance reduces it by 33.2 percent, and that investment fund operation pushes up the investment rate by 9.8 percent and its operation with high governance raises it by 46.8 percent.

Keywords: natural resource funds; stabilization fund; investment fund; saving fund; volatility; resource curse (search for similar items in EconPapers)
JEL-codes: H29 O38 (search for similar items in EconPapers)
Date: 2022-08
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:114392

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