Operational Aspects of Fiscal Policy in Oil-Producing Countries

October 1, 2002

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Format: Chicago

Steven A Barnett, and Rolando Ossowski. Operational Aspects of Fiscal Policy in Oil-Producing Countries, (USA: International Monetary Fund, 2002) accessed September 18, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

Oil-producing countries face challenges arising from the fact that oil revenue is exhaustible, volatile, and uncertain, and largely originates from abroad. Reflecting these challenges, the paper proposes some important general principles for the formulation and assessment of fiscal policy in these countries. The main findings can be summarized in some key guidelines: the non-oil balance should feature prominently in the formulation of fiscal policy; it should generally be adjusted gradually; the government should strive to accumulate substantial financial assets over the period of oil production; and, where necessary, strategies should aim at breaking procyclical fiscal responses to volatile oil prices.

Subject: Commodities, Expenditure, Fiscal policy, Fiscal stance, Oil, Oil prices, Oil, gas and mining taxes, Prices, Taxes

Keywords: Exchange rate, Fiscal policy, Fiscal policy decision, Fiscal policy discussion, Fiscal policy response, Fiscal sustainability, Gas and mining taxes, Government spending, Non-oil deficit, Nonrenewable resources, Oil, Oil deficit, Oil price, Oil price decline, Oil price development, Oil price volatility, Oil prices, Oil revenue, Oil-producing countries, Petroleum, Price movement, Spot oil price, Understanding fiscal policy development, WP

Publication Details

Pages:

35
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2002/177
Stock No:

WPIEA1772002
ISBN:

9781451858884
ISSN:

1018-5941

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