Operational Aspects of Fiscal Policy in Oil-Producing Countries

Fiscal Sustainability in Heavily Indebted Countries Dependenton Nonrenewable Resources: The Case of Gabon

“…Fiscal sustainability should be considered in the context of a comprehensive approach that aims at a progressive reconstitution of the government's net wealth following the exhaustion of oil reserves. As in Barnett and Ossowski (2002), this section shows that optimal fiscal policy critically hinges on a careful targeting of the non-oil budgetary primary balance and a conversion of oil revenue into financial assets, so as to ensure a replacement of the oil wealth by financial assets. However, unlike in Barnett and Ossowski (2002) and Baunsgaard (2003), this paper does not assume the maintenance of the current net wealth.…”

“…As in Barnett and Ossowski (2002), this section shows that optimal fiscal policy critically hinges on a careful targeting of the non-oil budgetary primary balance and a conversion of oil revenue into financial assets, so as to ensure a replacement of the oil wealth by financial assets. However, unlike in Barnett and Ossowski (2002) and Baunsgaard (2003), this paper does not assume the maintenance of the current net wealth. In view of the uncertainty associated with the estimation of the net wealth, the paper proposes a gradual fiscal adjustment of the non-oil primary balance that allows a progressive replacement of oil resources by financial assets, without imposing any specific path for non-oil revenue or government expenditure.…”

Governance, natural resources rent, and infrastructure development: Evidence from the Middle East and North Africa

“…Countries can borrow from SWFs and spend in a steady‐state path from its annuity value (for details, see Basdevant, 2008; Davis et al, 2002; Leigh & Olters, 2006; Olters, 2007; Segura, 2006). Another approach for managing natural resources revenue is to consider that incremental consumption is a function of the interest earned from the SWFs (Barnett & Ossowski, 2003; Bjerkholt, 2002; Van der Ploeg & Poelhekke, 2009). Two World Bank (2003, 2007) studies documented that governance does matter for development, and that the appropriate allocation of resources can efficiently lead to a desirable outcome.…”

Norway: Selected Issues

“…Prepared by Etibar Jafarov (EUR) and Daniel Leigh (FAD).8 Unless otherwise specified, GDP in this paper refers to mainland GDP, which is all domestic production except from exploration of crude oil and natural gas, services activities incidental to oil and gas, and transport via pipelines; and ocean transport.9 Norway has been one of the first oil-producing countries measuring its fiscal policy stance based on non-oil budget balances. SeeBarnett and Ossowski (2003) on why this approach is more appropriate for countries with exhaustible resources.©International Monetary Fund. Not for Redistribution…”

“…For the derivation of Equation (1), and its application to a number of oil producing countries, see, for example,Barnett and Ossowski (2003),Olters (2006), andCarcillo, Leigh, andVillafuerte (2007). Tersman (1991) applies a similar framework for Norway.14 SeeIMF (2006) for recommendations to Gabon made in the context of the 2006 Article IV consultations.©International Monetary Fund.…”