- Jeffrey Davis, Annalisa Fedelino, and Rolando Ossowski
- Published Date:
- August 2003
Fiscal Policy Formulation and Implementation in Oil-Producing Countries
J.M. Davis, R. Ossowski, and A. Fedelino
INTERNATIONAL MONETARY FUND
© 2003 International Monetary Fund
Production: IMF Graphics Section
Cover design: Lai Oy
Figures: Theodore Peters
Composition: Julio R. Prego
Fiscal policy formulation and implementation in oil-producing countries / edited by J.M. Davis, R. Ossowski, A. Fedelino—Washington, D.C.: International Monetary Fund, c2003.
1. Petroleum industry and trade. 2. Petroleum products. Prices. 3. Petroleum. Taxation. 4. Fiscal policy. I. Davis, Jeffrey M., 1946- II. Ossowski, Rolando. III. Fedelino, Annalisa. IV. International Monetary Fund. HD9560.5.F36 2003
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Jeffrey Davis, Rolando Ossowski, and Annalisa Fedelino
Ricardo Hausmann and Roberto Rigobon
Steven Barnett and Rolando Ossowski
Benn Eifert, Alan Gelb, and Nils Borje Tallroth
Steven Barnett and Alvaro Vivanco
Emil M. Sunley, Thomas Baunsgaard, and Dominique Simard
Charles E. McLure, Jr.
Ehtisham Ahmad and Eric Mottu
Jeffrey Davis, Rolando Ossowski, James A. Daniel, and Steven Barnett
John Wakeman-Linn, Paul Mathieu, and Bert van Selm
James A. Daniel
Sanjeev Gupta, Benedict Clements, Kevin Fletcher, and Gabriela Inchauste
Giulio Federico, James A. Daniel, and Benedict Bingham
Martin Petri, Giinther Taube, and Aleh Tsyvinski
Oil is a vital element of the world economy, and oil-producing countries represent an important group of IMF members. The Fund’s surveillance and program work with oil producers has highlighted the difficult fiscal and macroeconomic challenges that reliance on oil revenues poses for policymakers.
It is clear that many countries have had difficulties in addressing the challenges posed by oil dependence. Notably, the growth performance of many oil producers has been disappointing; despite their huge natural resources, many of these countries still face widespread poverty; and the volatility of oil prices has often been associated with a stop-go pattern of expenditures that has proved costly in economic and social terms.
When considering these issues, it is necessary to recognize that not all producers are the same, and that key factors vary from country to country. Lessons should be distilled from the varied experiences, but they should be applied with due regard for each country’s particular circumstances. In considering what worked and what did not, a key focus should be on how to manage oil resources in a way that contributes to a stable macroeconomic environment, broad-based sustainable growth, and durable poverty reduction.
In my view, it is critical to broaden the discussion to encompass political and institutional factors, since the management of oil resources does not take place in a vacuum. At the IMF, we are also attaching growing importance to the transparency with which oil revenues are collected and used. These are difficult and often sensitive topics, but they need to be addressed.
I welcome this book that, in exploring a wide range of critically important issues, brings together the IMF’s operational experience with oil-producing countries—including work carried out in the Fiscal Affairs Department over the past few years—and significant contributions from outside experts. The IMF strives to be an open institution that learns from experience and dialogue, because we do not have all the answers. I hope that the publication of this volume will stimulate further dialogue with member countries and, more generally, promote further policy research and debate on these difficult but important issues.
International Monetary Fund
This book is the result of collective efforts from many individuals. Many of the papers were presented at the Conference on Fiscal Policy Formulation and Implementation in Oil-Producing Countries organized by the IMF’s Fiscal Affairs Department (FAD) during June 5-6, 2002, and benefited from comments of participants in the conference. Some of them were originally issued as IMF Working Papers, and reflect comments from many colleagues in the Fund.1
We are grateful to colleagues in the Fiscal Operations I division of FAD, both for their comments on these papers and their contribution to our operational work on fiscal policy issues in oil-producing countries over the past several years. We would also like to acknowledge the papers and comments contributed by other colleagues in the IMF, the World Bank, and other international financial institutions, government officials, academics and experts, and representatives of the oil industry.
Special thanks are due to Steven Barnett, who provided constructive views on the issues covered in this volume. We appreciate the excellent research assistance provided by Alvaro Vivanco. Particular thanks are due to Heather Huckstep for her exceptional effort in managing the correspondence with authors and preparing the manuscript for publication. We also gratefully acknowledge the valuable assistance of Eva Farrugia in organizing the conference. Sean M. Culhane of the External Relations Department edited the manuscript and coordinated its production.
Finally, we would like to thank Teresa Ter-Minassian, Director of FAD, for her support for this project.
The views expressed throughout this publication are those of the contributing authors only and do not necessarily represent the position or policies of either their own national governments or any organization, government, or entity mentioned anywhere in this publication.
One paper was presented at an earlier conference and published in its proceedings, and thanks are due to the International Research Center for Energy and Economic Development (ICEED) in Boulder, Colorado, for allowing us to reprint it.