An econometric study on the classification and effectiveness of natural resource funds

Taguchi, Hiroyuki and Ganbayar, Javkhlan (2022): An econometric study on the classification and effectiveness of natural resource funds.

Abstract

This article aims to examine the effectiveness of natural resource funds in resource-rich countries according to the funds’ objectives by an econometric method using panel data. This study’s contribution is to demonstrate fund-specific evaluation: the study classifies the funds into three kinds by their objectives: stabilization fund, investment fund and saving fund, and then evaluates each fund’s effectiveness by each criteria corresponding to each objective. The econometric estimations identified the effectiveness of stabilization fund in reducing the volatility of government expenditure and primary balance and the effectiveness of investment fund in raising investment rate. They also confirmed the facilitation of the fund’s effectiveness under the combination between the fund’s operation and high governance. The econometric study further found that the operation of stabilization fund reduces the volatility of government expenditure by 13.6 percent and its operation with high governance reduces it by 33.2 percent, and that investment fund operation pushes up the investment rate by 9.8 percent and its operation with high governance raises it by 46.8 percent.

• Item Type: MPRA Paper
• Language: English
• Keywords: natural resource funds, stabilization fund, investment fund, saving fund, volatility, resource curse
• Subjects: H - Public Economics > H2 - Taxation, Subsidies, and Revenue > H29 - Other; O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights > O38 - Government Policy

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