Regulation and State Intervention in Non-Renewable Natural Resources: The Cases of the Oil and Gas Sectors in Argentina

51 Pages Posted: 23 Jan 2015

See all articles by Enrique Kawamura

Enrique Kawamura

University of San Andres (UMSA) - Department of Economics

Date Written: April 1, 2014

Abstract

This paper develops a theoretical model based on stylized facts regarding regulation and performance of the oil and gas sectors in Argentina after the fall of Convertibility. Regarding performance, facts include an important drop in domestic production and investment, as well as a reversal in the energy trade balance (from surplus to deficit). Regulations include a direct government intervention in upstream and downstream prices (below international ones), together with strong restrictions to export. The model uses a self-enforcing equilibrium concept derived from Yared (2010) to endogeneize such policy variables such as upstream domestic prices and downstream energy prices. The model can explain some of the regulation policies observed in the facts, including very low energy prices and strictly positive subsidies.

Keywords: Regulation, non-renewable resources, energy, political economy models

JEL Classification: Q38, Q48

Suggested Citation

Kawamura, Enrique, Regulation and State Intervention in Non-Renewable Natural Resources: The Cases of the Oil and Gas Sectors in Argentina (April 1, 2014). Available at SSRN: https://ssrn.com/abstract=2553939 or http://dx.doi.org/10.2139/ssrn.2553939

Enrique Kawamura (Contact Author)

University of San Andres (UMSA) - Department of Economics ( email )

Vito Dumas 284
B1644BID Victoria, Buenos Aires
Argentina

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