Calculating Sustainable Non-mineral Balances as Benchmarks for Fiscal Policy: The Case of Botswana

Author/Editor:

Jens R Clausen

Publication Date:

May 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:

Assuming a social welfare function that smoothes expenditure, this paper calculates a sustainability benchmark for the non-mineral balance in Botswana that is based on a notion of a "permanent income" from non-renewable resources. It is derived by constructing a hypothetical annuity from revenues from these resources, which is held constant in terms of GDP. Botswana is an interesting case because current projections suggest that diamond resources could be largely exhausted within a generation.

Series:

Working Paper No. 2008/117

Subject:

Fiscal policy Fiscal stance Natural resources Non-renewable resources Personal income

English

Publication Date:

May 1, 2008

ISBN/ISSN:

9781451869774/1018-5941

Stock No:

WPIEA2008117

Pages:

15

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