Fiscal policy in commodity-exporting LDCs

John Cuddington

No 33, Policy Research Working Paper Series from The World Bank

Abstract: Revenues in countries that rely heavily on one or two primary commodities tend to fluctuate widely with prices in international markets. This fluctuation is especially wide when export taxes are a large part of the total tax base but also when the private sector reaps most of the gains from booming prices. Most developing countries have over consumed in response to windfalls from surges in world prices. In many cases government spending has outstripped the gain in revenues. These sharp increases in government spending are difficult to reverse when the boom ends and often lead to large fiscal deficits rather than surpluses. Several countries, however, whose policies emphasize conservative fiscal management, have generally benefitted from booms. Clearly, good fiscal control during periodic boom episodes enables these booms to temporarily accelerate the rate of economic development.

Keywords: Environmental Economics&Policies; Economic Theory&Research; Economic Stabilization; Macroeconomic Management; TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT (search for similar items in EconPapers)
Date: 1988-07-31
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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:33

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 ().