Do Resource-Rich Countries Suffer from a Lack of Fiscal Discipline?
Fiscal indicators for resource-rich and resource-poor low- and middle-income countries are compared using annual data from 1996 to 2012. Resource richness is defined by export composition: fuel greater than a 25 percent share and/or ores and metals...
| Main Authors: | , |
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| Format: | Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2016
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2016/02/25860947/resource-rich-countries-suffer-lack-fiscal-discipline http://hdl.handle.net/10986/23727 |
| Summary: | Fiscal indicators for resource-rich and
resource-poor low- and middle-income countries are compared
using annual data from 1996 to 2012. Resource richness is
defined by export composition: fuel greater than a 25
percent share and/or ores and metals greater than a 10
percent share. Fuel exporters have a significantly better
general government fiscal balance than the rest of the
sample, and higher revenues and expenditures, which are
approximately evenly split between extra consumption
expenditure and extra capital expenditure. Only about a
quarter of their extra revenue goes into extra consumption
expenditure, and this proportion has been lower since 2005.
Fuel exporters' expenditure reacts with a lag to oil
price fluctuations. There are no significant differences
between ores and metals exporters and resource-poor
countries, or between new and old resource exporters, in
aggregate expenditures and revenues. Ores and metals
exporters spend more on investment and less on government
consumption. Some individual country cases are briefly discussed. |
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