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Measuring the Performance of Fiscal Policy in Russia

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  • Antonio Spilimbergo

Abstract

This paper evaluates the performance of fiscal policy since the 1998 crisis, along several dimensions and using a variety of indicators. Russia has progressed tremendously in recent years on public debt sustainability largely because the real interest rates on public debt have been negative and growth has been high. However, the constant oil-price balance shows a progressive worsening starting in 2001 with a modest reversal in 2004. As to optimal fiscal policy in a country endowed with exhaustible resources, analysis of the nonoil fiscal balance shows that Russian fiscal policy has had a mixed record. It has spent part of the windfall before introducing the oil stabilization fund, but has saved most of the oil revenues in the last two years. The standard fiscal impulse shows that budget policy has not contributed to the increase in aggregate demand since 2003. However, the fiscal position was not tight enough to contain the inflationary effect of the exceptional oil windfalls for the economy as a whole.

Suggested Citation

  • Antonio Spilimbergo, 2007. "Measuring the Performance of Fiscal Policy in Russia," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 43(6), pages 25-44, November.
    • Handle: RePEc:mes:emfitr:v:43:y:2007:i:6:p:25-44
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    1. Paul Cashin & Hong Liang & C. John McDermott, 2000. "How Persistent Are Shocks to World Commodity Prices?," IMF Staff Papers, Palgrave Macmillan, vol. 47(2), pages 1-2.
    2. Nienke Oomes & Oksana Dynnikova, 2006. "The Utilization-Adjusted Output Gap: Is the Russian Economy Overheating?," IMF Working Papers 2006/068, International Monetary Fund.
    3. Harold Hotelling, 1931. "The Economics of Exhaustible Resources," Journal of Political Economy, University of Chicago Press, vol. 39(2), pages 137-137.
    4. Mr. H. Takizawa & Mr. E. H. Gardner & Mr. Kenichi Ueda, 2004. "Are Developing Countries Better Off Spending Their Oil Wealth Upfront?," IMF Working Papers 2004/141, International Monetary Fund.
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    Cited by:

    1. Kamilya Tazhibayeva & Mr. Aasim M. Husain & Anna Ter-Martirosyan, 2008. "Fiscal Policy and Economic Cycles in Oil-Exporting Countries," IMF Working Papers 2008/253, International Monetary Fund.
    2. Irina N. Ilina & Carol S. Leonard & Evgenij E. Plisetskij, 2014. "Russian Regional Resilience: Finance, Cooperation And Resource Abundance (A Case Study Of Khanty-Mansiysk)," HSE Working papers WP BRP 15/PA/2014, National Research University Higher School of Economics.
    3. Giovanni Covi, 2014. "Dutch disease and sustainability of the Russian political economy," ECONOMICS AND POLICY OF ENERGY AND THE ENVIRONMENT, FrancoAngeli Editore, vol. 2014(2), pages 75-110.
    4. Mr. Alfredo Baldini, 2005. "Fiscal Policy and Business Cycles in an Oil-Producing Economy: The Case of Venezuela," IMF Working Papers 2005/237, International Monetary Fund.
    5. Nagwa Amin Abdelkawy & Abdullah Sultan Al Shammre, 2024. "Fiscal Policy and Economic Resilience: The Impact of Government Consumption Alongside Oil and Non-Oil Revenues on Saudi Arabia’s GDP during Crises (1969–2022)," Sustainability, MDPI, vol. 16(14), pages 1-31, July.

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