Attitudes, social values and norms of the top management. Download it once and read it on your kindle device, pc, phones or tablets. Development partners have little direct leverage on oilexporting countries, but can help through. However, despite their huge natural resources, many oil producers have had disappoint, isbn 9781589061750 buy the fiscal policy formulation and implementation in oilproducing countries ebook.
Promotion of mutual investments between oil producing and. This harmonisation of policies is enacted in the rbf act and is effected through a number of institutional. Policy formulation and implementation 1 portal written. The main findings can be summarized in some key guidelines. Process of public policy formulation in developing countries. The implementation encloses all actions that take place during the realisation of the plans, i.
Process of public policy formulation in developing countries prof. There is the existence of a strong cointegration relation between government spending and oil prices the paper found fiscal policy to be procyclical in oil producing countries, i. The western iocs now control less than 10% of the worlds oil and gas resource base. The fiscal management of natural resource revenues in a developing country setting english abstract. Eduardo engel and rodrigo valdes latin american and. Policy formulation and implementation 6 portal written material implementation is normally regarded as a vital and often neglected phase of strategic planning. Balassone, 2006, kia, 2008 that oilproducing countries are unique in the sense that the fiscal policy in these countries is affected by the. Governments in each of these countries must look beyond the global crisis and make courageous tradeoffs to ensure a sustainable future for public finances. Implementation in oil producing countries, washington, d. However, the majority of the worlds proven oil reserves are in developing countries and economies in transition, which often lack sophisticated.
Many estimate oil sands place the countrys oil reserves pdf second to saudi arabia. Oil exporters to continue coordination towards final market. In oilproducing countries, a relatively small decline in oil prices leads to a. Imf operational work includes technical assistance for timorleste, a conference on fiscal policy in oilproducing countries. However, oil producing countries outside the opec lacked such spare capacity and thus continued to increase investment in oil production to meet global oil demand. The role of national oil companies in international. Economic and financial resources available to it at a particular point of time. Welfare implications are sensitive to the choice of the social welfare function, initial conditions, and non oil growth prospects.
The united states dependence on oil has long influenced its foreign policy. Fiscal adjustment in nonoil producing mena countries. Lee fiscal policy formulation and implementation in oilproducing countries por jeffrey mr. Ilzetzki and vegh 2008, find, using instrumental variable regression, strong evidence of procyclical fiscal policy in developing countries. Do phu hai, faculty of public policy graduate academy of social science gass, vietnam abstract. It is the sister strategy to monetary policy through which a.
In a poor country, fiscal policy can no longer remain a compensatory fiscal policy. This volume brings together papers that deal with a wide range of macroeconomic and fiscal issues in oilproducing countries, and aims at providing policy recommendations drawing on theory and country experience. While no single growth and development pattern or policy fix is suit able for. The basic factors that influence policy formulation are. Oil rents and economic growth in oil producing countries. Fiscal policy challenges in oilexporting countries arab. The ppam programme includes in addition to some of the above policy analysis, policy implementation. The contribution of the oil sector to arab economic development by. Thus, the ratio of the nrb to nrgdp is a reliable and informative fiscal indicator for short and longterm analysis and fiscal policy formulation in resourcerich countries medas and zakharova. Fiscal breakeven oil prices council on foreign relations. Panel var analysis and the associated impulse responses indicate that in countries where the oil sector is large in relation to the economy, oil price changes affect the economic cycle only through their impact on fiscal policy. Fiscal policy formulation and implementation in oilproducing countries kindle edition by davis, jeffrey m. A primary concern for fiscal policy in these countries is determining how much of current oil revenue should be spent on current government expenditure and how much should be saved for future policy actions. Fiscal policy is the means by which a government adjusts its spending levels and tax rates to monitor and influence a nations economy.
Non oil producing countries in the middle east and north africa have spent the last decade working to achieve fiscal consolidation. Finalized in 2007, the project explores the influence of emerging national oil companies and partially privatized national oil companies on international energy markets. The current section tests the effect of fiscal policy on oil production, the national funds revenue, gross international reserves and the effectiveness of the national fund. Fiscal policy and economic cycles in oilexporting countries. This volume brings together papers that deal with a wide range of macroeconomic and fiscal issues in oil producing countries, and aims at providing policy recommendations drawing on theory and country experience. Oilproducing country stabilization fund abstract setting an optimal. This article aims at determining the impact of various components of fiscal policy on the nigerian economy. Uvadare digital academic repository how to of fiscal. Poverty is still widespread in a number of oilproducing countries. Use features like bookmarks, note taking and highlighting while reading fiscal policy formulation and. Fall in oil prices poses a problem for russia, iraq and others. However, despite their huge natural resources, many oil producers have. This paper specifically focuses on how the lc policy has impacted on small to mediumsized oil servicing firms operating within the oil and gas industry and data was collected using the multiplecase study method, from two case companies.
Fiscal policy in oil producing countries during the recent oil price cycle. What actors do in policy formulation, how they do it, and with what effect, depend in large part on the type of advisory system present in a specific government or area of interest brint, 1990. Fiscal policy formulation and implementation in oilproducing countries. Besides, almost all of the countries that have signed loanfor oil deals with china are projected to suffer significant declines in oil production during the period leading up to 2035.
Policy formulation clearly is a critical phase of the policy process which also is an explicit subject of policy design. From a shortrun perspective, the nonoil balance is a key indicator of government demand on the economy. Effectiveness in this context means whether the national fund helps to stabilize government expenditure and reer. In the mid1800s, kerosene produced from refined crude oil begins to make its way onto the market in. Bhola 2004 suggests that policy implementation is a process to actualise, apply and. Resourcerich countries often face three major macroeconomic challenges. What is not well recognized is that during the mid1980s, the oil market reached a turning point in which demand for opec oil slowly started to increase. Xiao ye and other colleagues who have provided material for this paper as well as the discussants and other participants in the conference who provided useful comments. Jun 19, 2008 european commission press release details page brussels, 19 june 2008 oil prices what are the structural factors behind the rising oil prices. It has a tough role to play in a developing economy and has to face the problem of growthcumstability. Read fiscal policy formulation and implementation in oilproducing countries by jeffrey mr. Dutch disease, short to mediumterm procyclical fiscal policy and longrun boombust cycles. Operational aspects of fiscal policy in oilproducing countries.
Fiscal policy formulation and implementation in oil producing. World bank, petroleum revenue management workshop proceedings, 2004. Introduction fiscal policy formulation and implementation in oilproducing countries was edited by j. Their study showed that resourcedependent economies tend to grow more slowly than nonresourcedependent ones at comparable levels of development. The exhaustibility and volatility of natural resource revenues pose wellknown economic challenges, of which those facing oil producers are the most prominent.
Policy instrument is a linkage between policy formulation and policy implementation. Fiscal policy can play a central role in determining the extent to which a country benefits from its oil wealth. This book brings together studies that provide analysis and findings on fiscal policy issues in oil producing countries from a diverse international perspective. Operational aspects of fiscal policy in oilproducing. The fourth explores the broader economic and financial ramifications of the collapse in the price of oil. Reflecting these challenges, the paper proposes some important general principles for the formulation and assessment of fiscal policy in these countries. This paper presents a detailed analysis of the average fiscal policy responses of oil producing countries opcs to the recent oil price cycle. Policy instruments are often known as governing tools as well, particularly when they. The public policy formulation is part of the predecision. This paper empirically assesses the impact of oil price shocks on the underlying non oil economic cycle in oil exporting countries. The investment challenge for oil producing countries.
The third analyses oil firms responses to lower oil prices against the backdrop of high debt. This book brings together studies that provide analysis and findings on fiscal policy issues in oilproducing countries from a diverse international perspective. No single definition it is what governments say and do or do not a public policy is a plan of action undertaken by government to achieve some broad purpose affecting large. Fiscal vulnerability to resourceprice reversals fiscal positions are often vulnerable to reversals after price booms in resourcerich economies.
Stabilization and savings funds for nonrenewable resources. Measuring fiscal performance in oilproducing countries. Use the free adobe acrobat reader to view pdf files. Fiscal policy formulation and implementation in oil. Read fiscal policy formulation and implementation in oil producing countries by jeffrey mr. Oct 16, 2014 from moscow to caracas, riyadh to baghdad, in tehran, algiers, kuwait city and lagos, officials are confronting the plunge in prices roughly 25 percent since a peak in june. Of the top 20 oil producing companies in the world, 14 are nocs or newly privatized nocs. Oilproducing countries face challenges arising from the fact that oil revenue is exhaustible, volatile, and uncertain, and largely originates from abroad. Perhaps, when mutual investments between oil producing and consuming countries having equitable investment along the entire value chain in both producing and consuming markets, this dream of finding theright price for oil will be achieved. The intention in policy formulation is reflected in policy implementation through instrument. The distribution of non oil wealth is important for countries with relatively low oil reserves. Also, the implementation of the local content development policy may be. In fiscal policy formulation and implementation in oilproducing countries, ed. Policy makers, economists, and public finance professionals working in such.
Throughout the 1990s and into the next century, economic liberalization, market economy reforms and westernstyle corporatization management reorganizations have characterized the oil and gas industries of major energy. In terms of current world oil production, nocs also dominate. A survey of environmentally relevant clauses the oil and gas industry faces increasingly strict environmental standards in developed countries. A primer on fiscal analysis in oilproducing countries.
Oil revenues and fiscal policy overview challenges posed by oil revenue fiscal policy and macroeconomic stability the non oil primary balance fiscal policy and intergenerational issues oil funds expenditure management some guidelines oil producing countries differ importance of oil in the economy and fiscal accounts development of the non oil. Hence, the analysis needs to incorporate an osf and an osf allocation rule. We simply used descriptive statistics to show contribution of government fiscal policy to economic growth, and to ascertain and explain growth rates, and an ordinary least square ols in a multiple form to ascertain the relationship between economic growth and government expenditure. The discussion of longrun fiscal issues in section ii and the shortrun analysis of fiscal policy in section iii have highlighted the importance of the nonoil fiscal balance as a fiscal indicator in oilproducing countries. Fiscal policy in oil producing countries during the recent. However, despite their huge natural resources, many oil producers have had disappointing growth, widespread poverty, and continuing vulnerability to oil price and other external shocks. Fiscal policy in oilproducing countries can be profoundly affected by oil revenue uncertainty and volatility. Oil prices and the fiscal policy response in oilexporting.
Fiscal policy formulation and implementation in oilproducing. However, at many stages of the policy formulation, input is sought from the reserve bank. Oilproducing countries and the use of special fiscal institutions zmany opcs have had difficulties in addressing the challenges posed by dependence on oil revenues. The fiscal management of natural resource revenues in a. Past fiscal policy in nigeria has not been successful in this regard, since both revenue and expenditure have been highly. Nigerian content policy in the oil and gas industry.
The per capita oil consumptioneconomic growth nexus is examined in a panel of oil producing countries over a long time span 19702012, controlling for the exports of goods and services, the ratio of oil production to primary energy consumption, the oil rents, and international crude oil prices. An overview jeffrey davis, rolando ossowski, and annalisa fedelino. Introduction man as an individual and in society is a being of social nature. Is fiscal policy procyclical in developing oilproducing.
Countries with large oil resources can benefit substantially from them. The extractive industries ei sector occupies an outsize space in the economies of many developing countries. The role of fiscal institutions in managing the oil revenue boom. Policy instrument an overview sciencedirect topics. Investment policy prospects in the oil and gas producing countries resource nationalism is a cyclical phenomenon whereby governments assert varying degrees of control over natural resources located within their territories, in an attempt to maximise revenue. Policy formulation should factor in the exhaustibility of the natural resources and aim at reducing oil revenue volatility passed on to the economy. The political economy of fiscal policy and economic. Prepared by mauricio villafuerte and pablo lopezmurphy1. We refer to this problem as the optimal consumption problem. The minister, who believed that the meeting with lamamra and boutarfa was very fruitful, added that the meeting concluded a series of meetings with officials from various oil producing countries such as russia, iraq, iran, kuwait, oman, saudi arabia and qatar. The paper presents numerical simulations of various fiscal rules for oil producing countries.
Paper prepared for imf conference on fiscal policy formulation and implementation in oil producing countries, june 56, 2002. Fiscal policy is captured by restrictions on the size of the non oil primary deficit nopd of the public sector plus the rule for allocating current oil revenues between the osf and the budget. Factors influencing policy formulation and decision. Fedelino and brings together papers that deal with a wide range of macroeconomic and fiscal issues in oilproducing countries, and aims at providing policy recommendations drawing on theory and country experience. Davis, ossowski, and fedelino 2003 looked at fiscal policy formulation and implementation in oilproducing countries. Operational aspects of fiscal policy in oilproducing countries october 2002.
Fiscal policy can play a central role indetermining the extent to which a country benefits from its oil wealth. The political economy of fiscal policy and economic management. A government in deficit can face pressure to raise. How to of fiscal sustainability in oilrich countries. Recently it has become popular among oilproducing countries to establish oil revenue funds, which are believed. The fiscal policy in developing countries should apparently be conducive to rapid economic development. The views expressed in this paper are those of the authors and should not be attributed to the world bank or to its executive directors or the. Many of the papers were presented at the conference on fiscal policy formulation and implementation in oilproducing countries organized by the imfs fiscal affairs department fad during june 56, 2002, and benefited from comments of participants in the conference.
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