The Risks of Fiscal Policy in Countries Rich in Natural Resources
11 Pages Posted: 4 Dec 2013
Date Written: December 3, 2013
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: Suggested Citation