Managing future oil revenues in Ghana: An assessment of alternative allocation options

Contemporary policy debates on the macroeconomics of resource booms often concentrate on the short-run Dutch disease effects of public expenditure, ignoring the possible long-term effects of alternative revenue-allocation options and the supply-side impact of royalty-financed public investments. In...

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Autores principales: Breisinger, Clemens, Diao, Xinshen, Schweickert, Rainer, Wiebelt, Manfred
Formato: Artículo preliminar
Lenguaje:Inglés
Publicado: International Food Policy Research Institute 2009
Materias:
Acceso en línea:https://hdl.handle.net/10568/161922
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author Breisinger, Clemens
Diao, Xinshen
Schweickert, Rainer
Wiebelt, Manfred
author_browse Breisinger, Clemens
Diao, Xinshen
Schweickert, Rainer
Wiebelt, Manfred
author_facet Breisinger, Clemens
Diao, Xinshen
Schweickert, Rainer
Wiebelt, Manfred
author_sort Breisinger, Clemens
collection Repository of Agricultural Research Outputs (CGSpace)
description Contemporary policy debates on the macroeconomics of resource booms often concentrate on the short-run Dutch disease effects of public expenditure, ignoring the possible long-term effects of alternative revenue-allocation options and the supply-side impact of royalty-financed public investments. In a simple model applied here, the government decides the level and timing of resource-rent spending. This model also considers productivity spillovers over time, which may exhibit a sector bias toward domestic production or exports. A dynamic computable general equilibrium (DCGE) model is used to simulate the effect of temporary oil revenue inflows to Ghana. The simulations show that beyond the short-run Dutch disease effects, the relationship between windfall profits, growth, and households’ welfare is less straightforward than what the simple model of the “resource curse” suggests. The DCGE model results suggest that designing a rule that allocates oil revenues to both productivity-enhancing investments and an oil fund is crucial to achieving shared growth and macroeconomic stability.
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spelling CGSpace1619222025-11-06T05:47:24Z Managing future oil revenues in Ghana: An assessment of alternative allocation options Breisinger, Clemens Diao, Xinshen Schweickert, Rainer Wiebelt, Manfred oil and gas production public expenditure growth computable general equilibrium models development policies Contemporary policy debates on the macroeconomics of resource booms often concentrate on the short-run Dutch disease effects of public expenditure, ignoring the possible long-term effects of alternative revenue-allocation options and the supply-side impact of royalty-financed public investments. In a simple model applied here, the government decides the level and timing of resource-rent spending. This model also considers productivity spillovers over time, which may exhibit a sector bias toward domestic production or exports. A dynamic computable general equilibrium (DCGE) model is used to simulate the effect of temporary oil revenue inflows to Ghana. The simulations show that beyond the short-run Dutch disease effects, the relationship between windfall profits, growth, and households’ welfare is less straightforward than what the simple model of the “resource curse” suggests. The DCGE model results suggest that designing a rule that allocates oil revenues to both productivity-enhancing investments and an oil fund is crucial to achieving shared growth and macroeconomic stability. 2009 2024-11-21T09:59:30Z 2024-11-21T09:59:30Z Working Paper https://hdl.handle.net/10568/161922 en Open Access application/pdf International Food Policy Research Institute Breisinger, Clemens; Diao, Xinshen; Schweickert, Rainer; Wiebelt, Manfred. 2009. Managing future oil revenues in Ghana. IFPRI Discussion Paper 893. https://hdl.handle.net/10568/161922
spellingShingle oil and gas production
public expenditure
growth
computable general equilibrium models
development policies
Breisinger, Clemens
Diao, Xinshen
Schweickert, Rainer
Wiebelt, Manfred
Managing future oil revenues in Ghana: An assessment of alternative allocation options
title Managing future oil revenues in Ghana: An assessment of alternative allocation options
title_full Managing future oil revenues in Ghana: An assessment of alternative allocation options
title_fullStr Managing future oil revenues in Ghana: An assessment of alternative allocation options
title_full_unstemmed Managing future oil revenues in Ghana: An assessment of alternative allocation options
title_short Managing future oil revenues in Ghana: An assessment of alternative allocation options
title_sort managing future oil revenues in ghana an assessment of alternative allocation options
topic oil and gas production
public expenditure
growth
computable general equilibrium models
development policies
url https://hdl.handle.net/10568/161922
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