IDEAS home Printed from https://ideas.repec.org/a/kap/itaxpf/v17y2010i4p340-356.html
   My bibliography  Save this article

Resource rents; when to spend and how to save

Author

Listed:
  • Anthony Venables

Abstract

Countries with substantial revenues from renewable resources face a complex range of revenue management issues. What is the optimal time profile of consumption from the revenue, and how much should be saved? Should saving be invested in foreign funds or in the domestic economy? How does government policy influence the private sector, where sustainable growth in the domestic economy must ultimately be generated? This paper develops the issues in a simple two-period model, and argues that analysis must go well beyond the simple permanent income approach sometimes recommended.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Anthony Venables, 2010. "Resource rents; when to spend and how to save," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 17(4), pages 340-356, August.
    • Handle: RePEc:kap:itaxpf:v:17:y:2010:i:4:p:340-356
    DOI: 10.1007/s10797-010-9137-9
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/s10797-010-9137-9
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s10797-010-9137-9?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Frederick van der Ploeg & Anthony J. Venables, 2011. "Harnessing Windfall Revenues: Optimal Policies for Resource‐Rich Developing Economies," Economic Journal, Royal Economic Society, vol. 121(551), pages 1-30, March.
    2. Anthony Venables & Paul Collier, 2009. "Natural Resources and State Fragility," OxCarre Working Papers 031, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.
    3. Kimball, Miles S, 1990. "Precautionary Saving in the Small and in the Large," Econometrica, Econometric Society, vol. 58(1), pages 53-73, January.
    4. Bhattacharyya, Sambit & Hodler, Roland, 2010. "Natural resources, democracy and corruption," European Economic Review, Elsevier, vol. 54(4), pages 608-621, May.
    5. Timothy J. Besley & Torsten Persson, 2008. "The Incidence of Civil War: Theory and Evidence," NBER Working Papers 14585, National Bureau of Economic Research, Inc.
    6. Bernard Gauthier & Albert Zeufack, 2010. "Governance And Oil Revenues In Cameroon," OxCarre Working Papers 038, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.
    7. Mr. Jan-Peter Olters, 2007. "Old Curses, New Approaches? Fiscal Benchmarks for Oil-Producing Countries in Sub-Saharan Africa," IMF Working Papers 2007/107, International Monetary Fund.
    8. Bernardin Akitoby & Thomas Stratmann, 2008. "Fiscal Policy and Financial Markets," Economic Journal, Royal Economic Society, vol. 118(533), pages 1971-1985, November.
    9. Mr. Mauricio Villafuerte & Mr. Rolando Ossowski & Mr. Theo Thomas & Mr. Paulo A Medas, 2008. "Managing the Oil Revenue Boom: The Role of Fiscal Institutions," IMF Occasional Papers 2008/003, International Monetary Fund.
    10. Christopher Adam & Anthony M Simpasa, 2010. "Harnessing Resource Revenues for Prosperity in Zambia," OxCarre Working Papers 036, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.
    Full references (including those not matched with items on IDEAS)

    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. How to manage rents from non-renewable resources
      by Economic Logician in Economic Logic on 2010-12-01 21:05:00

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Rod Tyers, 2014. "Asymmetry in Boom-Bust Shocks: Australian Performance with Oligopoly," CAMA Working Papers 2014-50, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    2. Melina, Giovanni & Yang, Shu-Chun S. & Zanna, Luis-Felipe, 2016. "Debt sustainability, public investment, and natural resources in developing countries: The DIGNAR model," Economic Modelling, Elsevier, vol. 52(PB), pages 630-649.
    3. Keyra Primus, 2016. "Fiscal Rules for Resource Windfall Allocation: The Case of Trinidad and Tobago," IMF Working Papers 2016/188, International Monetary Fund.
    4. Frederick Ploeg, 2012. "Bottlenecks in ramping up public investment," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 19(4), pages 509-538, August.
    5. Christine Richmond & Irene Yackovlev & Shu-Chun S. Yang, 2015. "Investing Volatile Resource Revenues in Capital-Scarce Economies," Pacific Economic Review, Wiley Blackwell, vol. 20(1), pages 193-221, February.
    6. Carpantier, J.-F. & Vermeulen, W.N., 2018. "Emergence of sovereign wealth funds," Journal of Commodity Markets, Elsevier, vol. 11(C), pages 1-21.
    7. Levine,Paul Leslie & Melina,Giovanni & Onder,Harun & Levine,Paul Leslie & Melina,Giovanni & Onder,Harun, 2016. "Non-renewable resources, fiscal rules, and human capital," Policy Research Working Paper Series 7695, The World Bank.
    8. Rod Tyers & Aaron Walker, 2016. "Quantifying Australia's ‘Three-Speed’ Boom," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 49(1), pages 20-43, March.
    9. Robin Boadway & Michael Keen, 2014. "Rent Taxes and Royalties in Designing Fiscal Regimes for Non-Renewable Resources," CESifo Working Paper Series 4568, CESifo.
    10. Andrew Berg & Rafael Portillo & Shu-Chun S Yang & Luis-Felipe Zanna, 2013. "Public Investment in Resource-Abundant Developing Countries," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 61(1), pages 92-129, April.
    11. Jonathan Temple & Huikang Ying & Patrick Carter, 2014. "Transfers and Transformations: Remittances, Foreign Aid, and Growth," Bristol Economics Discussion Papers 14/649, School of Economics, University of Bristol, UK, revised 02 Dec 2014.
    12. World Bank, 2013. "Malaysia Economic Monitor, June 2013," World Bank Publications - Reports 16529, The World Bank Group.
    13. Banegas Rivero, Roger Alejandro & Vergara González, Reyna, 2019. "Evaluación de escenarios fiscales para Bolivia," Revista Latinoamericana de Desarrollo Economico, Carrera de Economía de la Universidad Católica Boliviana (UCB) "San Pablo", issue 32, pages 132-168, November.
    14. Ishak, Phoebe W. & Farzanegan, Mohammad Reza, 2020. "The impact of declining oil rents on tax revenues: Does the shadow economy matter?," Energy Economics, Elsevier, vol. 92(C).
    15. Batubara, Marwan & Purwanto, Widodo Wahyu & Fauzi, Akhmad, 2016. "Proposing a decision-making process for the development of sustainable oil and gas resources using the petroleum fund: A case study of the East Natuna gas field," Resources Policy, Elsevier, vol. 49(C), pages 372-384.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Stuart Landon & Constance Smith, 2015. "Rule-Based Resource Revenue Stabilization Funds: A Welfare Comparison," The Energy Journal, , vol. 36(2), pages 117-144, April.
    2. Paul Collier & Anthony Venables & Rick Van der Ploeg & Michael Spence, 2009. "Managing Resource Revenues in Developing," OxCarre Working Papers 015, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.
    3. Nouf Alsharif & Sambit Bhattacharyya & Maurizio Intartaglia, 2016. "Economic Diversification in Resource Rich Countries: Uncovering the State of Knowledge," Working Paper Series 09816, Department of Economics, University of Sussex Business School.
    4. Anthony J. Venables & Samuel E. Wills, 2016. "Resource Funds: Stabilising, Parking, and Inter-generational Transfer," Journal of African Economies, Centre for the Study of African Economies, vol. 25(suppl_2), pages 20-40.
    5. Alsharif, Nouf & Bhattacharyya, Sambit & Intartaglia, Maurizio, 2017. "Economic diversification in resource rich countries: History, state of knowledge and research agenda," Resources Policy, Elsevier, vol. 52(C), pages 154-164.
    6. repec:oxf:wpaper:oxcarre-research-paper-131 is not listed on IDEAS
    7. Amin Karimu & George Adu & George Marbuah & Justice Tei Mensah & Franklin Amuakwa-Mensah, 2017. "Natural Resource Revenues and Public Investment in Resource-rich Economies in Sub-Saharan Africa," Review of Development Economics, Wiley Blackwell, vol. 21(4), pages 107-130, November.
    8. Jeffrey Frankel, 2012. "The Natural Resource Curse: A Survey of Diagnoses and Some Prescriptions," Growth Lab Working Papers 36, Harvard's Growth Lab.
    9. Ton S van den Bremer & Frederick van der Ploeg, 2013. "Managing and Harnessing Volatile Oil Windfalls," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 61(1), pages 130-167, April.
    10. Samuel Wills, 2015. "Seven Principles for Managing Resource Wealth," Economics Series Working Papers OxCarre Research Paper 15, University of Oxford, Department of Economics.
    11. Araujo, Juliana D. & Li, Bin Grace & Poplawski-Ribeiro, Marcos & Zanna, Luis-Felipe, 2016. "Current account norms in natural resource rich and capital scarce economies," Journal of Development Economics, Elsevier, vol. 120(C), pages 144-156.
    12. Anthony J. Venables, 2016. "Using Natural Resources for Development: Why Has It Proven So Difficult?," Journal of Economic Perspectives, American Economic Association, vol. 30(1), pages 161-184, Winter.
    13. Mahadeva Lavan, 2014. "Why does natural resource abundance not always lead to better outcomes? Limited financial development versus political impatience," The B.E. Journal of Macroeconomics, De Gruyter, vol. 14(1), pages 341-377, January.
    14. Banegas Rivero, Roger Alejandro & Vergara González, Reyna, 2019. "Evaluación de escenarios fiscales para Bolivia," Revista Latinoamericana de Desarrollo Economico, Carrera de Economía de la Universidad Católica Boliviana (UCB) "San Pablo", issue 32, pages 132-168, November.
    15. Torfinn Harding & Frederick Ploeg, 2013. "Official forecasts and management of oil windfalls," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 20(5), pages 827-866, October.
    16. Frederick van der Ploeg & Anthony J. Venables, 2011. "Harnessing Windfall Revenues: Optimal Policies for Resource‐Rich Developing Economies," Economic Journal, Royal Economic Society, vol. 121(551), pages 1-30, March.
    17. Toon Vandyck & Alban Kitous & Bert Saveyn & Kimon Keramidas & Luis Rey Los Santos & Krzysztof Wojtowicz, 2018. "Economic Exposure to Oil Price Shocks and the Fragility of Oil-Exporting Countries," Energies, MDPI, vol. 11(4), pages 1-19, April.
    18. Alssadek, Marwan & Benhin, James, 2023. "Natural resource curse: A literature survey and comparative assessment of regional groupings of oil-rich countries," Resources Policy, Elsevier, vol. 84(C).
    19. Sambit Bhattacharyya & Paul Collier, 2014. "Public capital in resource rich economies: is there a curse?," Oxford Economic Papers, Oxford University Press, vol. 66(1), pages 1-24, January.
    20. Nouf Alsharif & Sambit Bhattacharyya & Maurizio Intartaglia, 2016. "Economic Diversification in Resource Rich Countries: Uncovering the State of Knowledge," Working Paper Series 9816, Department of Economics, University of Sussex.
    21. Ongo Nkoa, Bruno Emmanuel & Song, Jacques Simon & Minkoue Bikoula, Brice, 2024. "Natural resource rents in developing countries: Is the positive influence on the fragilities real?," Resources Policy, Elsevier, vol. 89(C).

    More about this item

    Keywords

    Natural resources; Revenue management; Resource curse; Permanent income; Q32; O11; E2; H0;
    All these keywords.

    JEL classification:

    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • H0 - Public Economics - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:itaxpf:v:17:y:2010:i:4:p:340-356. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.