Are Diamonds Forever? Using the Permanent Income Hypothesis to Analyze Botswana’s Reliance on Diamond Revenue

Author/Editor:

Olivier Basdevant

Publication Date:

March 1, 2008

Electronic Access:

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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:

This study assesses the sustainability of Botswana’s diamond-related fiscal revenue. Diamond reserves are not adequate to generate enough permanent revenue to sustain a high level of expenditure. Under the current fiscal rule that no debt may be accumulated, Botswana will have to save more to avoid an abrupt adjustment in the medium term.

Series:

Working Paper No. 08/80

Subject:

English

Publication Date:

March 1, 2008

ISBN/ISSN:

9781451869415/1018-5941

Stock No:

WPIEA2008080

Price:

$18.00 (Academic Rate:$18.00)

Format:

Paper

Pages:

13

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