The Basilicata Wealth Fund: resource policy and long-run economic development in Southern Italy

Roberto Iacono ()

MPRA Paper from University Library of Munich, Germany

Abstract: This paper contributes to the growing political economy literature of within-country natural resources management, by proposing a new resource policy for the oil-rich southern Italian region of Basilicata. The policy proposal is to establish a (regional) wealth fund in which all the royalty revenues from non-renewable natural resource exploitation in Basilicata would be stored and fully converted into low-risk financial assets. The scope is to give priority to long-run investments as to better exploit revenues from large-scale extraction of natural capital. Establishing a wealth fund at the regional sub-national level is a novel approach that can be applied to other resource-rich regions in the world. I label the fund as the Basilicata Wealth Fund (BWF). The BWF would be a regionally owned investment fund, however independently administered from national authorities (for instance, as an independent legal entity under the jurisdiction of the Bank of Italy). In addition, the paper posits a transparent and clear-cut spending fiscal rule in order to let regional authorities use the resource revenues to finance economic policy. The clear advantage from the BWF would be the stronger focus on long-run economic development and the higher accountability, hence avoiding misuse of resource revenues for myopic fiscal spending.

Keywords: Exhaustible natural resources; Sovereign Wealth Fund; Regional economy; Long-run economic development; Basilicata. (search for similar items in EconPapers)
JEL-codes: O13 Q32 R11 R58 (search for similar items in EconPapers)
Date: 2015-09-01
New Economics Papers: this item is included in nep-ene
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/66393/1/MPRA_paper_66393.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/72858/1/MPRA_paper_72858.pdf revised version (application/pdf)

Related works:
Working Paper: The Basilicata Wealth Fund: Resource Policy and Long-run Economic Development in Southern Italy (2015)
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:pra:mprapa:66393

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().