The Risks of Fiscal Policy in Countries Rich in Natural Resources

11 Pages Posted: 4 Dec 2013

See all articles by Alexander Knobel

Alexander Knobel

Gaidar Institute for Economic Policy; Russian Presidential Academy and Public Administration (RANEPA) - Institute of Applied Economic Studies

Date Written: December 3, 2013

Abstract

The article addresses the issue of fiscal policy risks in countries with an abundance of natural resources, including Russia. It is demonstrated which consequences Russia’s federal budget may be faced with as a result of declining oil prices. In the context of phenomena typical of resource-dependent economies, it is shown that they have a tendency toward a lower rate of long-term economic growth. The macroeconomic and institutional aspects of the resource curse and the role of sovereign funds in shaping up the budget policy are discussed, with a special emphasis being made on their institutional importance.

Keywords: resource curse, budget policy, institutions, economic growth, sovereign funds

JEL Classification: H61, O11, Q32

Suggested Citation

Knobel, Alexander, The Risks of Fiscal Policy in Countries Rich in Natural Resources (December 3, 2013). Available at SSRN: https://ssrn.com/abstract=2362818 or http://dx.doi.org/10.2139/ssrn.2362818

Alexander Knobel (Contact Author)

Gaidar Institute for Economic Policy ( email )

3-5 Gazetny Lane
Moscow, 125009
Russia

Russian Presidential Academy and Public Administration (RANEPA) - Institute of Applied Economic Studies ( email )

Vernadsky Ave. 82
Moscow, 119571
Russia

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