Managing Revenue Volatility in a Small Island Economy: The Case of Kiribati
August 1, 2005
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Summary
The formulation of fiscal policy in Kiribati faces unusual challenges. Kiribati's revenue base is among the most volatile in the world, and it possesses sizeable financial assets. Drawing on lessons from some other countries who experience high volatility in their revenues, this paper proposes a fiscal policy rule for Kiribati which is nested within a medium-term macroeconomic framework that aims to ensure the sustainable use of Kiribati's financial assets while managing the impact of extreme revenue volatility. It also discusses improvements in the institutional fiscal policy framework that could support such a framework.
Subject: Agroindustries, Budget planning and preparation, Expenditure, Fiscal policy, Oil
Keywords: annual budget, budget law, fishing license fee, nominal rate, RERF assets, RERF drawdown, RERF sustainability, WP
Pages:
23
Volume:
2005
DOI:
Issue:
154
Series:
Working Paper No. 2005/154
Stock No:
WPIEA2005154
ISBN:
9781451861730
ISSN:
1018-5941
