Public Investment in a Developing Country Facing Natural Resource Depletion
| Autor: | Dalia Hakura, Adrian Alter, Matteo Ghilardi |
|---|---|
| Rok vydání: | 2017 |
| Předmět: |
Economics and Econometrics
050208 finance Economic policy media_common.quotation_subject 05 social sciences Development Public capital Return on investment Debt Capital (economics) 0502 economics and business Sustainability Economics Revenue 050207 economics Fiscal adjustment Fiscal sustainability media_common |
| Zdroj: | Dalia Hakura |
| ISSN: | 1464-3723 0963-8024 |
| Popis: | This paper analyses the trade-offs between savings, debt, public investment and capital sustainability in a developing country with looming oil exhaustibility concerns. We find that an optimal policy that maximises welfare and preserves capital and fiscal sustainability involves a moderate scaling-up of public investment in the short term. Alternative public investment paths are shown not to be optimal as they either create risks to capital and fiscal sustainability or do not fully harness the oil revenue windfall. We also show that there are large welfare gains for low-income countries from structural reforms that improve the efficiency of public investment and the project selection process. Finally, the paper highlights the fiscal and debt sustainability risks from volatile oil prices and inadequate fiscal adjustment. |
| Databáze: | OpenAIRE |
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