Temporary windfalls and compensation arrangements

Bela Balassa

No 28, Policy Research Working Paper Series from The World Bank

Abstract: Sharp fluctuations in the export prices of a major staple commodity can have jarring effects on economic activity. To reduce these undesirable effects and at the same time, increase the government's share in the proceeds of the booming sector, developing countries can funnel the revenue from higher export earnings into a special compensation fund. The fund works by setting up a variable export levy somewhere between the actual export price and an agreed-upon base, and the government appropriates the windfall revenues. In a downturn, the fund pays producers the base price. This paper accordingly examines the case for establishing compensation arrangements and the forms they may take. As an introduction to the discussion, considerations introduced in regard to permanent and temporary windfalls will be reviewed, followed by a brief analysis of the experience of several countries with temporary windfalls such as Chile and Cameroon.

Keywords: Environmental Economics&Policies; Markets and Market Access; Access to Markets; Economic Theory&Research; Crops&Crop Management Systems (search for similar items in EconPapers)
Date: 1988-06-30
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www-wds.worldbank.org/external/default/WDSC ... d/PDF/multi_page.pdf (application/pdf)

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:wbk:wbrwps:28

Access Statistics for this paper

More papers in Policy Research Working Paper Series from The World Bank 1818 H Street, N.W., Washington, DC 20433. Contact information at EDIRC.
Bibliographic data for series maintained by Roula I. Yazigi ().