Direct Distribution of Resource Revenues: Worth Considering?

Staff Discussion Notes, June 10, 2014

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Some scholars have argued that direct distribution of natural resource revenues to the population would help resource-rich countries escape the “resource curse.”
The discussion note analyzes whether direct distribution of resource revenues is a viable policy alternative for resource-rich countries.
The first priority for policymakers is to establish fiscal policy objectives to support macroeconomic stability and development objectives.
Establishing an adequate fiscal framework that informs decisions on how much to save and invest, how to smooth out revenue volatility, and how to deal with exhaustibility issues should precede any discussion of direct distribution of resource wealth to the population.

Fiscal policy objectives must be defined before considering direct distribution mechanisms.
An adequate fiscal framework should:
- Inform decisions on saving versus investing resource revenues.
- Provide mechanisms to smooth out revenue volatility.
- Address resource exhaustibility issues.
Direct distribution should be considered only after these fiscal framework issues are addressed.

Subject: Currencies, Environment, Expenditure, Income, Money, National accounts, Natural resources, Population and demographics
Keywords: cash transfers, country authorities, Currencies, direct redistribution, East Africa, fiscal policy, governments Bloated, Income, Middle East, natural resource, natural resources, North Africa, resource curse, resource exhaustibility, resource revenue, resource wealth, resource wealth management, revenues DDMs, SDN