Measuring Fiscal Performance in Oil-Producing Countries

Abstract

Oil producing countries face unique challenges in the conduct of fiscal policy with respect to both fiscal sustainability and macroeconomic stabilization. Concerning sustainability, complications arise from the fact that a significant part of the current revenue stream comes from exhaustible resources whose overall value is highly uncertain. The volatility of oil price also complicates fiscal management over the medium term. This paper defines and applies a simple 'toolkit' for a broad-brush assessment of how oil producing countries are coping with such challenges. The paper finds that the attainment of sustainable fiscal positions remains an issue in many countries, while a more mixed picture emerges with respect to the contribution of fiscal policy to stabilization.

Keywords: sustainability, stabilization, non-renewable resources, fiscal indicators

JEL Classification: E63, H63, L78