Calculating Sustainable Non-mineral Balances as Benchmarks for Fiscal Policy: The Case of Botswana
May 1, 2008
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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.
Subject: Fiscal policy, Fiscal stance, Natural resources, Non-renewable resources, Personal income
Keywords: mineral revenue, revenue, revenue projection, WP
Pages:
15
Volume:
2008
DOI:
Issue:
117
Series:
Working Paper No. 2008/117
Stock No:
WPIEA2008117
ISBN:
9781451869774
ISSN:
1018-5941
