Should Developing Countries Constrain Resource-Income Spending? A Quantitative Analysis of Oil Income in Uganda

Hassler, John; Krusell, Per; Shifa, Abdulaziz B.; Spiro, Daniel

doi:10.5547/01956574.38.1.jhas

Cited by 7 publications

(4 citation statements)

References 39 publications

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“…In the last 60 years, when the role of oil in the world economy began to increase rapidly, most of the economic scientists and specialists, politicians, national and international financial institutions and research centers touched on this topic. Grennes and Winokur (1974), Lienert (1981), Jan Fabritius and Petersen, (1981), Jones (1982), Shaffer and Fischer (1982), Helliwell et al (1982), Looney (1985), Stauffer (1985), Hammoudeh (1988), Adelman (1989), Choucri et al (1990), Smith (1992), Huntington (1998), Acemoglu et al (2013), Caselli and Michaels, (2013), Kennedy and Tiede (2013), Pierru and Matar (2014), Brueckner and Gradstein, (2016), Usman (2017), Hassler et al (2017), , , Murshed (2018), Baumeister et al (2018), González (2018), Boyd et al (2000), Zallé (2022).…”

Section: Literature Reviewmentioning

confidence: 99%

The Impact of Oil Prices on State Budget Income and Expenses: Case of Azerbaijan

Humbatova

2023

IJEEP

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Since Azerbaijan is one of the oil exporting countries, its macroeconomic indicators, especially the exchange rate, the state budget are highly dependent on the oil factor. This study assessed the role of oil in the economy and the impact of the oil factor on the revenues and expenditures of the state budget of Azerbaijan in manat and dollar terms. The study covers the period 2005m03 − 2022m05. Unit root (Augmented Dickey−Fuller (ADF), Phillips−Perron (PP) and Kwiatkowski−Phillips−Schmidt−Shin (KPSS)) tests were applied to check the stationarity of variables (time series). ARDL was applied as a research method. In terms of the reliability of the obtained results, the error correction model (ECM) was used, standard tests were carried out, and the joint integration methods of FMOLS, DOLS and CCR were also applied in the evaluation. Engel−Granger and Phillips−Ouliaris tests have been used to test for cointegration interactions between variables. Short−term, long−term, and strong associations between variables were also calculated. The results of the study showed that the state budget depends on the oil and gas sector, and fluctuations in world oil prices functionally and along the chain affect oil revenues and the state budget. A different impact of oil prices (oil revenues) on the state budget in terms of manat and dollar was the devaluation of the manat, which was carried out to reduce the impact of the global financial and economic crisis on Azerbaijan. The general conclusion of the study was a recommendation to further accelerate work on the diversification of the economy and the development of the non−oil sector. The results of the conducted research can serve as a scientific basis for the economic policy of the state aimed at reducing the impact of external oil price shocks on the economy of Azerbaijan and other similar oil−exporting countries, including on the state budget, and diversifying the economy. The functional dependencies of the income and expenses of the state budget in terms of manat and dollar on world oil prices are given below.

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Section: Literature Reviewmentioning

confidence: 99%

The Impact of Oil Prices on State Budget Income and Expenses: Case of Azerbaijan

Humbatova

2023

IJEEP

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“…A central finding of the literature is that many of the causes can be traced back to the quality of institutions, both nationally and locally. Oftentimes, factors such as political instability, volatility of resource rents, economically inefficient spending, and institutional capacity determine whether resource wealth turns out to be a blessing or a curse (Hassler et al, 2017;Khanna, 2017;Ponce and McClintock, 2014;Poncian, 2019).…”

Section: Related Literaturementioning

confidence: 99%

The Local Impact of Mining in Peruvian Districts: Evidence of a Subnational Resource Curse?

Bahlburg

2023

IJEEP

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In the early 2000s, Peru experienced a major mining boom as global prices skyrocketed. At the same time, the country implemented a revenue-sharing arrangement between the national government and subnational governments, to redistribute the newly gained financial windfalls. Using census as well as survey data, we compare producing and non-producing districts in order to determine the effects of mining transfers on local development. We find evidence that producing districts were characterized by better development than non-producing districts before the establishment of a transfer of mining rents (the so-called Canon Minero). These effects persist when comparing districts over time. Concerning the effect of Canon Minero transfers on local development, we find that these transfers, through district governments’ expenditures, contribute to a reduced poverty rate and increased per capita consumption when comparing producing as well as non-producing districts in producing provinces to non-producing districts in non-producing provinces.

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“…However, it must be noted that an SWF is not a universal remedy to the problems of resource-rich economies and needs to be used with caution (Scheiner, 2015;Sivramkrishna, 2019;Van der Ploeg, 2019). Several studies report that investing the wealth of the country in foreign nations when the demands of developing infrastructure are pressing at home can entail significant opportunity costs (Amoako-Tuffour, 2016;Hassler et al, 2017). This is especially true of countries from sub-Saharan Africa, which have recently started incorporating SWFs despite the fact that their "physical and social infrastructure stocks" are proclaimed to be "among the lowest in the world" (Amoako-Tuffour, 2016; Dabla-Norris et al, 2011).…”

Section: Impact Of Sovereign Wealth Funds On Home Countriesmentioning

confidence: 99%

The impact and implications of SWFs: a systematic review of literature

Garg

Shukla

2021

QRFM

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Purpose This paper aims to systematically review all available evidence on the implications of sovereign wealth funds (SWFs) for various stakeholders (recipients of sovereign investment, home countries, which incorporate SWFs and the world at large) and offer future research directions. Design/methodology/approach A systematic literature review (SLR) technique is used to review 102 handpicked articles for the period 2005‐2019. Findings This review reveals that the literature on the impact of SWFs emerged only during the financial crisis of 2008–2011 and much of it is qualitative in nature. The literature is lopsidedly focused on the impact of SWFs on target firms and there has been a limited empirical investigation of the impact on other stakeholders. There is a lack of consensus in several areas, which calls for additional research. Few areas, which have not been addressed in the literature and can be taken up by future researchers include the impact of SWFs on macroeconomic fundamentals and stock markets of recipient countries, especially emerging economies; implications of SWFs for alternative asset classes; impact on the welfare of citizens and internationalization strategies of home countries; impact on initial public offerings and unlisted corporations; and impact on innovativeness, efficiency and corporate governance practices of target firms. Originality/value To the best of the authors’ knowledge, this is the first paper to use the SLR technique to review the literature on SWFs. It considers the impact of SWFs on all stakeholders and covers both qualitative and quantitative literature published over a long period of 2005‐2019. It also systematizes all available evidence on this theme and identifies important research gaps, which may be helpful for academicians, practitioners and policymakers.

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Should Developing Countries Constrain Resource-Income Spending? A Quantitative Analysis of Oil Income in Uganda

Cited by 7 publications

References 39 publications

The Impact of Oil Prices on State Budget Income and Expenses: Case of Azerbaijan

The Impact of Oil Prices on State Budget Income and Expenses: Case of Azerbaijan

The Local Impact of Mining in Peruvian Districts: Evidence of a Subnational Resource Curse?

The impact and implications of SWFs: a systematic review of literature

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