Index
Note: Page numbers followed by f indicate figures, page numbers followed by t indicate tables, and page numbers followed by b indicate boxes.
A
Absolute pro-poor growth, 149, 150b
Access. See Services, access to
Accountability
commodity price volatility and, 354
of government budget, 113–14, 113f
new technology for, 363
proposals for reform of fiscal rule for, 132
of sovereign wealth fund, 115f
Ad-hoc social support scheme, 63
Advisory Committee for Fiscal Responsibility Funds of the MoF, 117–18
Advisory Committee for the Reference Copper Price of the MoF (ACRCP), 117–18, 123
Advisory Committee for Trend GDP of the MoF (ACTG), 117–18, 122
Africa. See also Sub-Saharan Africa country
capital good pricing in, 92–93
diversification of weather risks in, 325
economic activity, diversifying, 219–20
mineral exports from, 36
as oil/gas exporter, 37–38
resource horizon to depletion in, 89
as resource-rich country, 87
Africa RiskView software, 325
African Development Bank, 102
African Growth Opportunity Act (AGOA), 220
Afrobarometer, 249
Aggregate consumption, 252
Aggregate demand
factors affecting, 80
reduction of, 80
Agricultural employment, 260
working age population in, 261f
Agricultural input subsidy, 63
Agricultural Price Risk Management Product, 325
Agricultural productivity, farm policies for, 322
Agricultural raw material index, 56f
Agriculture. See also Natural resource
low total factor productivity growth in, 292
Agriculture investment/development, 327
Agriculture productivity growth, 291–93
Agriculture risk management
joint donor program for, 325–27
public-private partnership for, 327–28
Alaska Permanent Fund, 24–25
Anarchy, unsustainability and, 15–17
Anderson-Neary balance-of-trade function, 335
Anticorruption commissions, 101–2
AR(1) productivity shock, in flexible and sticky price sectors, 78
Arab resource-rich country, wealth of, 228
Arab Spring, 234
ASEAN Emergency Rice Reserve (AERR), 290–91
ASEAN. See South East Asian Nations (ASEAN)
ASEAN+3 Emergency Rice Reserve (APTERR), 290–91
Asia. See also Developing Asia
agriculture productivity in, 291–93
Asian Development Bank (ADB), food prices and poverty, 277
Asian term option, 305–6, 305f
cost comparison of, 304t
volatility of, 304
Auditing, of government budgets, 110, 134
Autocratic institution, 14–15
commodity endowment and, 25
Azerbaijan
GDP growth by sector, 169, 170, 170f
growth, understanding sources of, 170–72
inclusive growth and labor market, 172–78
labor productivity and wage gains, 173, 173f, 174, 175, 176, 176f
manufacturing, 175f
mining, 174f
natural resource boom and, 161–62
B
Bachelet, President, 23
Balance-of-trade function, 337
Banco de México
FEIP year-end balances in, 300f
oil hedging program participation, 300
Bangladesh, macroeconomic, poverty, consumption aggregates in, 255t
Barter contract, 41–42
“Beggar-thy-neighbor” policy, 279
Bird-in-the-hand rule, 90
Blair, Tony, 47
Botswana’s Pula Fund, management of, 22
Brent crude oil, 304
Brent-Maya spread/monthly correlation, 298b
Bretton Woods system, 45
breakdown of, 287
food price volatility and, 319
Budget Office of MoF (DIPRES), 120
Budgetary management, 110
elements of, 138
as opaque, adverse effects of, 137
Budget-planning horizon, 110–11, 137
Bundling, 42
Bureaucratic overstretch, 38
C
Cambodia
employment in, 260t
macroeconomic, poverty, consumption aggregates in, 255t
Cameroon. See also Sub-Saharan Africa country
employed, definition of, 273
employment in, 260t
Engel curves for food in, 266t
growth incidence curves in, 254f
growth spell ending in, 199f, 200
household consumption determinants for, 257t
living standards survey characteristics for, 269t, 271t
macroeconomic, poverty, consumption aggregates in, 253t
working age population versus employment ratio for, 259f
Capital good pricing, 92–93
Capital spending, 93–94
Cardin-Lugar Amendment, 103
Cash transfer program, 215–16
Central bank
for custodial role of natural assets, 99
inflation targeting and, 71–72
interest rate smoothing and, 78
of Mexico
put option trading, 309
oil-hedging program and, 308–9
oil-hedging program execution and, 300, 308–9
challenges to, 309
roles of, 101–2
welfare gain and, 79–80
Central government
accounts, growth and copper prices, 106f
expenditure and revenue ratio to GDP, 126f
net assets ratio to GDP, 128f
revenue and expenditure growth rate, 126f
Centre for Regional Information and Studies, 364
Ceteris paribus, 122
Child mortality, growth spells and, 195
Chile
advisory committees of MoF, 116
copper production/exportation by, 105
external control/auditing of government, 114
fiscal committees in, 117
fiscal policy for commodity exporting countries, 105–140
government revenue volatility and, 106
government transparency and accountability, 114
law on fiscal responsibility, 108–10
one-year budgeting framework of, 111
sovereign wealth funds in, 112
vector autoregression for economy, 131
Chile-style fiscal rule, 21, 22–23
CAB and, 119
objectives of, 118–19
shortcomings and proposals for reform of, 133–36
simulation studies for, 130
Civil society organization
EITI and, 355
transparency, role in, 350
Civil war
economic growth and, 17
mineral wealth and, 38
Claim-jumping, 17
Code of Good Practices on Fiscal Transparency, 350
CODELCO, 119
Collateral management, for oil-hedging program, 309
Colombia, growth spell ending in, 199, 199f
Commission on Growth and Development, systematic inequality of opportunity and, 148
Commitment technology
building, 98–99
features of, 99
Commodity boom, 20
bust versus, 7
Dutch disease and, 25
fiscal policy/macroeconomic performance and, 136–37
Commodity endowment, effects of, 25
Commodity export, 2
fiscal policy for, 105–40
countries, lesson for, 136–40
industrialization and, 20
in sub-Saharan African countries, 206–7
Commodity fund, 21
Commodity price contingent aid contract, 219
Commodity price index (CPI)
fluctuations of, 56f
food share in, 255t
inflation and, 58f
synchronized movements in, 279f
Commodity price index (CPI) basket, composition of, 57f
Commodity price shock, 55
effects of another, 62f
household budget and, 61
increasing resilience to, 65–66
inflation and, 64, 64f
policy responses to, 61, 63–65
risks of, 59–61
solutions to, 63
Commodity price subsidy, 63
Commodity price volatility, 2, 319
fiscal/monetary policy and, 61
impact and policy changes, 55–66
indices for recent years, 56f
inflation and, 60f
instruments to cope with
cash transfer program, 215–16
fiscal policy management, 218–19
international development community/donors and, 219–20
management of, 95–97
monetary policy and, 63
policies to deal with, 21–21
poverty and, 206
Prebisch-Singer hypothesis on, 25
reasons for, 12–13
savings/investment policies for, 96–97
in sub-Saharan Africa countries, 205
transparency/accountability and, 354
Commodity revenue
distribution of, 24–25
management of, 24
Common Market for East and Southern Africa (COMESA), 325
Common pool resource, 17
Commonwealth of Independent States, mineral exports from, 36
Comprehensive Africa Agriculture Development Programme (CAADP), 324–25
Concessionary countercyclical loan, 219
Conditional cash transfer program, 63
Constitutional law, 99
Consumer durable
NIPA versus survey data measures for demand of, 252
respondents owning, 251f
types of, 249
Consumer price index (CPI)
cost of living measures, 264
exports versus imports and, 24
product pricing versus, 21
Consumer price index (CPI) inflation, food price increases and, 285, 285f
Consumption, NIPA versus survey data measures for, 248b
Consumption demand, 80
Consumption growth, factors affecting, 246–47
Consumption inequality, terms of trade and, 213, 14f, 215
Consumption smoothing, 217
Contract, indexation to world prices, 21–22
Contract transparency, 360–61
Contractionary fiscal policy, 122
Convergence
investments and, 92–93
low-income countries and, 90–91
Copper
Chile exporting of, 105
indexation of debt and, 22
revenue from, 106f
Copper price elasticity, 120
Copper price, projected versus actual, 124, 129f
Copper price shock, 106
impulse response function for, 131, 131f, 132, 132f, 133f, 142f, 143f, 144f
Copper Revenue Compensation Fund, 109
Core inflation, 72–73
flexible headline IT versus, 81–82
sticky price sector and, 77–78
strict versus fexible, 77
Core price index, 73
Corruption, 39–40
uncovering in India, 50
weak transparency and oversight, 345
Countercyclical borrowing, 47–48
Countercyclical fiscal policy, 22–23
Credit market imperfection, 193
Credit-constrained consumer
consumption versus aggregate demand of, 80–81
interest rates and, 81
Cyclically adjusted balance (CAB), 109
definition of, 106
expenditure and revenue ratio to GDP, 125, 126
fiscal rule adoption based on, 138
fiscal rules and, 112, 119–20
government requirements under, 111
proposals for reform of fiscal rule for, 136
ratio of to GDP, 125, 125f
reduction of, 123, 124
target value for, fiscal policy variable for, 123–24
Cyclically adjusted revenue, proposals for reform of fiscal rule for, 135
D
Debt, denomination of, 21, 22
Deepwater Horizon drilling rig, 44
Demand
labor productivity and wage gains, 180
productivity shock and nontraded goods, 181–84 traded goods, 184–85
Democracy
in MENA region, 238f
privatization and, 45–46
taxation and, 14
Democratization, oil hindering, 226
Developing Asia
food price increase in, 277–93
poverty rate and, 282, 282f
global food trade, restoring confidence in, 287–88
inflation and growth effects in, 286f
public spending, rechanneling, 288–89
trade liberalization and, 287–88
Developing country
agricultural/food security policies in, 323–25
agriculture risk management in, 326
fiscal policy in, 19
foreign direct investments and, 37f
global price increase effect on, 285, 286
international trade and, 10
mineral wealth in, 36–38
as price-takers, 9
real per capita income in, 191f
rice/wheat Ti’s for, 344t
percentage changes, 345f
Direct distribution fund, 43
Diversification
challenges to
in MENA region, 234
in resource-rich countries, 232–33
industrial policies for, 238, 239
sustainable growth and, 161
sustainable growth, inclusive growth and, 164
of weather risks in Africa, 325
Dodd-Frank Act, Section 1504, 359–61
Dodd-Frank law, 363
Doha Round, 287
Doing Business, 92, 93
Domestic credit market, for low-income countries, 57
Domestic insulation policy, 287
Domestic retail price increase, 283f
Downbreak. See Growth downbreak
Dutch disease, 17–19, 25
approach to countering, 94
in MENA region, 233
resource curse and, 232–33
E
East Asian Emergency Rice Reserve (EAERR), 290
East Asia/Pacific, savings rate in, 229f
Economic and social stabilization fund (ESSF), 109
Economic challenge, of low-income countries, 1
Economic Community for West African States (ECOWAS), 325
Economic diversifcation. See Diversifcation
Economic growth
civil war and, 17
inclusive growth and, 150
of low-income countries, 1
Macroeconomic volatility versus, 230
in MENA region, 227
quality of institutions and, 14
of resource-rich countries, 2
volatility and, 39
Economic recovery, low-income countries and, 58
Ecuador, growth spell ending in, 199f, 200
Education, growth spells and, 195
Emerging country/group, 227
average schooling years in, 237f
bank deposits for, 232f
democracy, tendency of, 240, 240f, 241
GDP per capita growth and volatility, 230, 230f
life expectancy/mortality rate in, 237f
mean domestic credit to private sector for, 232f
natural capital of, 228f
output fluctuations in, 235f
production structure in, 233f
Employment
in sub-Saharan Africa countries, 259, 260t
in urban areas, 260
working age population ratio to, 261, 261f
Employment gain
during boom period, 177, 177f
labor productivity versus, 177f, 178
model for, 179–84
in sub-Saharan Africa countries, 260
Engel curve, 246
for food
in Cameroon, Ghana, Uganda, Zambia, 266t
in Ghana, 262, 264f, 265t
formula for, 262
Engel’s Law, 9
income changes, measuring, 262
Environmental scarcity, fear of, 11
Ethnic fractionalization, 198
Euler equation, 153–54
Europe, foreign direct investments and, 36, 37f
Everything But Arms (EBA), 220
Exchange rate overvaluation, 196, 197
Exchange rate policy, 21, 23
increase in, effects of, 94
noncommodity exporter and, 64–65
Expansionary fiscal policy, 123
Expenditure transparency, 50
Export
hedging proceeds of, 21, 22
impact of
barrier increases/decreases, 333, 334, 334f
restrictions, 332, 333f
productivity shock and demand, 181–84
Export tariff increase, 332
Extensive growth, 147–48
External control, of government budgets, 114
External shock, growth spells and, 196
Extraction. See also Resource extraction
low-income countries and, 41
of minerals, 40, 85
Extraction rate, 89–90
Extractive contract, 360–61
Extractive Industries Transparency Initiative (EITI), 49–50, 102–3
accountability at local level, 361
commitment to, 350
economic/development incomes and, 354–59
implementation of, 351
implementation of, effects of, 356
political constraints/capture of, 357
role of, 354–55
transparency and, 241
new technology for, 363
Extractive industry, 15
Extractive Industry Review, 350
F
Factor income, resource extraction and, 88
Farm policy, 322
in developing countries, 323–25
FARM-D, 325
Fertilizer subsidy, 284
Indonesia and, 284t
Financial Advisory Committee on Sovereign Funds of the MoF, 109, 112, 117, 118
Financial development, growth spells and, 195
Financial globalization, growth spells and, 197
Financial service, access to, 74, 75f
First-best policy, 61
Fiscal committee, 114
establishment of, 108
role of, 116
tasks of, 116
Fiscal council (FC), 114
establishment of, 108, 139–40
features of, 117
tasks of, 116, 135–36
Fiscal decentralization, 44
Fiscal policy, 19
for Chile, 22–23, 105–40
lessons for commodity exporting countries, 136–40
strengthening institutional framework of, 137–38
transparency/accountability of budgetary information, 138
Fiscal policy management, 218–19
Fiscal procyclicality, fiscal policy reform and, 137
Fiscal responsibility law, 108–10, 137
Fiscal revenue, resource-rich countries and, 56–57
Fiscal rule. See also Chile-style fiscal rule
adoption of, 138–39
CAB and, 119–20
elasticities in, 120
implementation, change and budget performance, 120–27
macroeconomic impact of, 127
number of countries with, 111
objectives of, 111–12
shortcomings and proposals for reform of, 133–36
Flexible core IT, 77
welfare gain and, 79, 80f
Flexible headline IT, 78
core IT versus, 81–82
welfare gain and, 80, 80t
Flexible price, sticky price versus, 75–78
Floating exchange rate, 24
Food and Agriculture Organization (FAO), 342
Food crisis/riot, 321
Food emergency
definition of, 289
Food expenditure
Engel curve for
in Cameroon, Ghana, Uganda, Zambia, 264t
in Ghana, 262, 264f, 265t
household budget and, 73–74, 74f, 74t
in total household expenditures, 281, 281f
Food export/import, 2
commodity price volatility and, 55–56
Food inflation, 73
Food price increase
contributing factors to, 331
CPI inflation and, 284, 285, 285f
crisis/riots from, 319
in developing Asia, 277–93
effects of, 280
fiscal costs, 283–84
local populations, 283
poor vulnerability, 281, 282, 283
factors affecting, 279–80
global, countries affected by, 286
household budget, effects of, 62f
inflation and, 60f
rice and wheat, 283f
trade barriers and, 287, 293
trade distortion and, 331–45
Food price index, 56f
increase in, effects of, 277, 278
for rice/wheat, 344f
structural shifts in, 278f
supply depletion and, 278
volatility and level of, 316, 316f
Food price shock, 60
agricultural input subsidy and, 63
impact of, 319
Food price volatility. See also Price volatility
adjustments in, 316
approaches to, 316–17
as international policy challenge, 315–28
over long term, 317f
trade bans and, 287
Food reserve, management of, 289–90
Food sector (flexible price), 76–78
Food security, 320
in developing countries, 326
international policy challenge with, 328–29
private actors and, 327
Food subsidy, 282
Indonesia and, 282t
Food voucher program with proxy-means testing, 63
Foreign direct investment, 37f
North American/Europe attracting, 36
Foreign loan, 48
Formal sector employment, 259
Fuel price increase
household budget, effects of, 63f
inflation and, 60f
Fuel price index, 56f
Fuel price shock, 60
Futures market, drawbacks of, 22
G
G20 declaration
agriculture risk management and, 326
food price volatility and, 315
objectives of, 322
role of, 323
Gas exporter
countries becoming, 37–38
Dodd-Frank Act, Section 1504 and, 359–60
Gas price index, 56f
Generally Accepted Principles and Practices for SWFs, 358–59
Ghana. See also Sub-Saharan Africa country
employed, definition of, 272–73
employment in, 260t
food expenditures for, 263f
Engel curve, 262, 264f, 265t, 266t
growth incidence curves in, 254f
household consumption determinants for, 257t
living standards survey characteristics for, 270t, 272t
macroeconomic, poverty, consumption aggregates in, 255t
Public Interest and Accountability Committee in, 351, 362b
working age population versus employment ratio for, 261f
Gini coefficient, 193
Global commodity price shock, 56
inflation and, 64f
Global energy trade, low-income countries and, 36
Global financial crisis, low-income countries and, 1
Global food trade, restoring confidence in, 287–88
Global market equilibrium, 338–39
Global price increase
countries afected by, 286
economic impact of, 280
on Asian economies, 285, 286
fiscal costs, 283–84
poor vulnerability, 281, 82
Global Witness, 49
Government assets/liabilities, rules for management of, 112–13
Government budget
external control/auditing of, 114, 138
transparency/accountability of, 113–14, 113f, 138
variables, GDP growth, and copper prices, correlations between, 129f
Government rent capture, 88
Government revenue, 40–50
changing sources of, 44–46
effects of, 38–40
reducing size of, 40–44
reform measures and, 40–50
undocumented, 351
Government spending
CAB and, 106–7
in Chile, 119
stabilization of, 138
Government transparency, 48–50
Government Watch, 50
Grain
pricing of
spikes in, 333
structural shifts in, 278f
reserve management of, 289–90
supply depletion of, 278
Gross domestic product (GDP)
central government expenditure and revenue ratio to, 126f
Chile and, 108
government assets and debts, 106
net government assets ratio to, 128f
per capita real GDP in Saudi Arabia, 165, 165f
projected growth rate of, 123f
revenue ratio to, 127f
trend growth rate of, 122f
in whole economy and oil sector, 163–64, 163f
Gross domestic product (GDP) deflator, growth, understanding sources of, 170–72
Gross domestic product (GDP) growth, 106f
GDP growth volatility versus, 209, 210, 210f
poverty reduction and, 209–10
Gross domestic product (GDP) growth volatility
GDP growth versus, 209, 210, 210f
poverty reduction and, 209–10
terms of trade volatility efect on, 212f
Growth. See also specific types of
constraint/factors affecting, 153–54
developing Asia, efect on, 286f
hazards to, 194–96
hills, valleys and plateaus of, 191f
hills of, 189f
income distribution and, 188, 198
macroeconomic versus microeconomic dimensions of, 148
methods to jumpstart, 149
pace and pattern of, 148, 150b
percentage, by sector, 172f
poverty reduction and, 151
in sub-Saharan Africa countries, 253, 256
super pro-poor policy efect on, 152
terms of trade/volatility efect on, 211–13
understanding sources of, 170–72
Growth break, by region and decade, 192t
Growth downbreak, 190
by region and decade, 192t
Growth incidence curve (GIC), findings for, 253
Growth laggard, 190, 192
Growth miracle, 192
Growth Report: Strategies for Sustained Growth and Inclusive Development, 148
Growth spell, 188
characteristics of, 193t
definition of, 190
duration of, 190, 194f
variables determining, 195–96, 197, 197f
ending of, 199–201, 199f
Growth sustainability, income distribution and, 192
Growth upbreak, 190
by region and decade, 192t
Grupo Propuesta Ciudadana (GPC), role of, 364
Guatemala, growth spell ending in, 199f, 200
Guide to Resource Revenue Transparency, 350
Gulf Cooperation Council (GCC) group, 227
average schooling years in, 237f
bank deposits for, 231, 232f
democracy, tendency of, 240, 240f, 241
GDP per capita growth and volatility, 230, 230f
life expectancy/mortality rate in, 237f
mean domestic credit to private sector for, 232f
output fluctuations in, 235f
production structure in, 233f
H
Hartwick rule, 228
Hausmann, Rodrick, and Velasco (HRV) framework
growth constraints, identification of, 153, 154–55
inclusive growth analytics and, 155
Headline inflation, 77–78
High-income country
rice/wheat Ti’s for, 342t
percentage changes, 343f
Historical volatility, 316–17
Hotelling rule, 90
Household budget
commodity price shocks and, 61
food expenditure and, 73–74, 74f, 83f
food expenditures and, 281, 281f
food/fuel price efect on, 63f
Household consumption
determinants of, 256, 257t, 258–59
expenditures per capita, 263f
growth incidence curves of, 254f
income and, 259
welfare measures through, 248, 248b, 252
HRV framework. See Hausmann, Rodrick, and Velasco (HRV) framework
Hubbert, Marion King, 11
Hubbert’s Peak, 11
I
Import Substitution Industrialization policy, 10
Import tariff reduction, 63
effects of, 334
Inclusive growth (IG)
analysis of, 149–50
definition of, 147–48
diversifcation and, 164
focus of, 150b
HRG framework to, 155
income growth and, 162
labor market and, 172–78
in MENA region, 225–41
natural resource wealth and, 164
in natural resource-intensive economies, 161–85
per capita growth and, 246
policies for, 150
productive employment and, 156–57
in sub-Saharan Africa countries, 249
in sub-Saharan Africa country, 245–67
transparency/accountability and, 359–60
wage gains and, 173
Inclusiveness, 148
Income
growth rate of, 19–20
household consumption and, 259
labor productivity versus mining, 173, 174
oil industry as, 310
raw material demand versus, 9
Income distribution, 149
equality in, 193
growth and, 188, 198
growth sustainability and, 192
social heterogeneity and, 198
Income elasticity, 74, 75f
Income growth, 149
inclusive growth and, 162, 173
in MENA region, 227
underestimation of, 264
Income insurance, 216
types of, 217
Indexation
copper producer and, 22
of oil/mineral contracts, 21–22
India
food/fertilizer subsidies in, 284, 284t
uncovering corruption in, 50
Indonesia
Centre for Regional Information and Studies in, 362
food/fertilizer subsidies in, 284
Indonesia and, food/fertilizer subsidies in, 284t
Industrial revolution, 15
Industrialization
commodity exports and, 20
history of, 15
Inequality
asset versus income, 152
decline in, 149
ethnic/religious fractionalization and, 198
factors countering, 188
Gini coefficient and, 193
growth spells and, 194f, 196
importance of, 187
of opportunity, 148
super pro-poor policy effect on, 152
sustainable growth and, 198
unsustainable growth and, 187–202
Inflation
commodity price index and, 58f
commodity price shock and, 64, 64f
developing Asia, effect on, 286f
impact of, 56
commodity pricing and, 60f
regional variations of, 58–59
Inflation targeting (IT), 21, 23–24
low-income country central banks and, 71–72
Institution, oil wealth versus, 20
Institutional rule, 99
Insurance, investment risks and, 95–96
Intensive growth, 147–48
Interest rate smoothing, 77–78
International Budget Partnership, 50
Open Budget Survey by, 113
International development community/donor, role of, 219–20
International Emergency Food Reserve, 290
International financial institution (IFI)
commitment technologies, role in, 99
low-income countries and, 66
transparency, role in, 352
International financial integration, 195
International Monetary Fund (IMF)
accountability/transparency initiatives, 363
transparency agenda, 350
undocumented government funds and, 349
International price volatility, national policy response to, 332–34
International public policy, challenges for, 319–23
International trade, developing countries and, 10
Investing-in-investing process
components of, 92–93
savings/investment policies and, 96
Investment
convergence and, 92–93
insuring, 95–96
resource depletion and, 98
Iraq EITI, 357
Isthmus crude oil, 304
J
Job for food program, 63
K
Kazakhstan, 94–95
Keynes-Ramsey rule, 153–54
L
Labor force
in MENA region growth rate of, 239f
in sub-Saharan Africa countries, defining, 274–75
Labor market
inclusive growth and, 172–78
in MENA region, 224
Labor productivity, 151
average wage growth based on, 176, 176f
average wage versus, 174
manufacturing, 175f
mining, 173, 174, 174f
employment gain versus, 177f, 178
model for, 179–84
value added per employee, 173, 173f, 174
Laspeyres-type CPI index, 264
Law-cum-institution, 99
Legislation, building commitment technology and, 99
Liquidity-constrained economy, 154
Low total factor productivity (TFP) growth, 291
Low-income, commodity price volatility and, 2
Low-income country
agriculture productivity in, 291–92
capital spending in, 93–94
commodity price shocks and, 55, 57–66
convergence of, 90–91
CPI basket composition for, 57f
economic status of, 1
food expenditure and, 73–74, 74f
formal sector employment in, 261
global energy trade and, 36
growth of, 58f, 157
inclusive growth approach and, 150
increasing resilience in, 65–66
inflation targeting and, 71–72
instruments to cope with volatility
cash transfer program, 215–16
fiscal policy management, 218–19
investing in, 37
monetary policy in, 81–82
petroleum extraction and, 41
petroleum wealth in, 35–50
recession and recovery, 58
resource depletion of, 87–88
savings/investment policies for, 88
tax and social safety net systems for, 57
M
Macroeconomic buffer, 65
Macroeconomic dimension of growth, 148
Macroeconomic volatility
economic growth versus, 230
growth spells and, 196
Manufactured goods volatility, 317
Manufacturing
crowding out, 7, 13–14
labor productivity and wage gains, 174, 175, 175f
model for, 180–84
Maya crude oil, 304
Maya put option
premium dispersion of, 309f
pricing of, 307
proxy of, 307f
strike price of, 306
Measurement of Economic Performance and Social Progress, The, 247
Merchandise trade, metals versus fuel, 36, 36f
Metal price index, 56f
Metal price shock, 60
Mexico. See also Oil Income Stabilization Fund (FEIP)
hedging strategy of, 21, 22
oil industry in, 297
crude types, 304
export shares, 298f
as income source, 314
monthly exports of, 303f
revenue from, 298f
Microcredit program, 216
Microecronomic dimension of growth, 148
Microfinance, 217
Middle East and North Africa (MENA) region
average schooling years in, 237f
classification of, 227
democracy, tendency of, 240f
diversification challenges for, 234
Dutch disease in, 233
economic growth in, 219
GDP per capita growth and volatility, 222, 222f
income growth in, 227
labor force in
expansion, 226
growth rate of, 239f
life expectancy/mortality rate in, 237f
natural resource curse in, 229, 230
financial development, 231
natural resources, volatility and inclusive growth in, 225–41
output fluctuations in, 235f
production structure in, 233f
savings rate in, 229f
stabilization of
boom-bust cycle, 234, 235–36
human capital/infrastructure investments, 236, 237–38
industrial policies, 238, 239
institutions and governance, 240, 241
Middle East, mineral exports from, 36
Mineral
indexation of contracts, 21–22
as natural resource curse, 8–9
as total merchandise trade share, 36, 36f
Mineral export, growth and, 8f
Mineral revenue, distribution of, 21
Mineral wealth
civil wars and, 38
effects of, 40
importance of, 36–38
Minerals Management Service, 45
Mining
Dodd-Frank Act, Section 1504 and, 361–62
labor productivity and wage gains, 173, 173f, 174, 174f
Mining revenue, fiscal rule and, 121
Ministry of Finance (MoF)
Advisory Committee for Fiscal
Responsibility Funds of, 117–18
Advisory Committee for the Reference
Copper Price of, 117–18, 123
Advisory Committee for Trend GDP of, 117–18, 122
advisory committees of, 116
Advisory Financial Committee for Fiscal
Responsibility Funds of, 109
budgetary management, elements of, 138
Financial Advisory Committee on Sovereign Funds of, 112
management of, 110
trend GDP growth and output gap projection by, 122f
Molybdenum price elasticity, 120
Monetary policy
commodity price volatility and, 63
in low-income economies, 81–84
Money-metric political-economy welfare loss function equation, 335–37
Motor vehicle, respondents owning, 251f
Mozambique. See also Sub-Saharan Africa country
employed, definition of, 274–76
employment in, 260t
growth incidence curves in, 254f
household consumption determinants for, 257t
living standards survey characteristics for, 270t, 272t
macroeconomic, poverty, consumption aggregates in, 255t
working age population versus employment ratio for, 261f
Multi-annual budgeting, 110–11
N
National income product account (NIPA) data, 247, 248b
Nationalization, privatization versus, 44–46
Natural capital
in Arab resource-rich countries, 228
of emerging countries, 228f
shares by region, 229f
Natural resource
access to, 250f
benefits versus risks of, 25
countries low/high in, 7–8
depletion of, 16
labor productivity and wage gain, model for, 180–84
in MENA region, 225–41
property rights of, 16–17
as public asset, 354
specialization, effects of, 25
true endowments versus exports, 20
Natural resource boom
impact of, 182
model for, 180–84
Saudi Arabia and Azerbaijan, 161–62
Natural resource curse
cause and examples of, 7
Dutch disease and, 232–33
ideas to address, 26
in MENA region, 229, 30
financial development, 231
policies to deal with, 20–25
public investment and, 98–99
skeptics to, 19–20
Natural resource exporter, 2
Natural resource fund management. See also Sovereign wealth fund (SWF)
transparency and, 358–59
Natural resource wealth
inclusive growth and, 164
income growth rate and, 19–20
Natural resource-intensive economy, inclusive growth in, 155–79
Natural Resources Charter, 49
transparency and, 357–58
New Economic Partnership for African Development (NEPAD), 324–25
New Partnership for Africa’s Development (NEPAD), 102
New Vision of Agriculture, 327
Newly industrialized country (NIC), postwar growth of, 151
Nigeria
barter contracts and, 42
growth spell ending in, 199f, 200
No taxation without representation, 14–15
Nominal assistance coefficient (NAC), 340–41
for upward wheat/rice price periods, 342t
Nominal rate of assistance (NRA), 344
contributions to total agriculture, by region, 346t
Noncommodity exporter, exchange rate policy and, 64–65
Nonfood inflation, 73
Nonfood sector (sticky price), 76–78
Nongovernment organization (NGO), oil sector transparency and, 49
Nongovernment salaried employee, defining, 274–75
Non-Gulf Cooperation Council (non-GCC) group, 227
average schooling years in, 237f
bank deposits for, 232f
democracy, tendency of, 240, 240f, 241
GDP per capita growth and volatility, 230, 230f
life expectancy/mortality rate in, 237f
mean domestic credit to private sector for, 232f
output fluctuations in, 235f
production structure in, 233f
Non-resource economy, natural resource boom and, 182–83
North American, foreign direct investments and, 36, 37f
North American Free Trade Agreement (NAFTRA), 297
O
Oil
countries producing, 36
crude types of, 304
democratization and, 226
developing countries and, 9
Dodd-Frank Act, Section 1504 and, 359–60
indexation of contracts, 21–22
as natural resource curse, 8–9
price scenario and strike price, 303f
pricing trends of, 10–12
Oil boom, in Saudi Arabia, 165–66, 166f
Oil contract, 360–61
Oil exporter
countries becoming, 37–38
Mexico as, 297, 298f
crude types, 277
income source for, 310
revenue from, 298f
Oil Income Stabilization Fund (FEIP), 298f
objective of, 299
source and use of funds from, 299t
year-end balances of, 300f
Oil revenue
decentralization of, 44
distribution of, 21
Oil sector transparency, 49
Oil wealth, institution versus, 20
Oil-denominated loan, 48
Oil-hedging program
accumulated barrels during, 309f
Banco de México participation in, 300
Central Bank executing, 300, 308–9
challenges to, 309–11
collateral management for, 309
execution of, 301, 308, 309
steps before, 301b
governance structure of, 299
objectives of, 301
performance of, 309
strategy characteristics for, 302t
options, 302, 302f
Oligarchic institution, 14–15
commodity endowment and, 25
Olmeca crude oil, 304
One-year budgeting, 110–11
Open Budget Survey, 113
Open-access resource, 16
Opportunity, systematic inequality of, 148
Option market, 21
cost comparison of, 304t
hedging proceeds on, 22
oil-hedging program and, 302, 302f
Organization for Economic Co-operation and Development (OECD)
CPI basket composition for, 57f
food trade and, 56
redistribution scheme, 149
volatility in economic growth, 230
Organization for Economic Co-operation and Development (OECD) country, as high-income, resource scarce, 88
Output gap projection, 122f
Output growth
percentage, by sector,172f
understanding sources of, 170–72
P
Panama, growth spell ending in, 199f, 200
Pension reserve fund, 109
Per capita growth, inclusive growth and, 246
Permanent-income approach, 106
Petroleum contract, 362–63
Petroleum revenue
distribution of, 42–43
government and, 38–40
stabilization of, 46–48
Petroleum wealth
importance of, 36–38
political economy of, 35–50
Philippines, Government Watch and, 50
Phosphate, 16
“Point source” resource, 15
Point-source natural resource-rich country, 352
Policy, for commodity price volatility, 20–21
Political economy, 194
growth spells and, 195
Political instability, 194
Postwar growth, in newly industrialized countries, 151
Poverty
commodity price volatility and, 206
economic growth and, 1
food price increases and, 277
in developing Asia, 282, 282f
food/fuel price effect on, 63f
GDP per capita growth and, 207
high growth rates and, 151
inflation and increase in, 61
microfinance and, 217
price volatility and, 321
redistribution schemes for, 149
in resource-rich country, 351
statistics on, 58
Poverty reduction
GDP growth/volatility, 209–10
in sub-Saharan Africa countries
determinants of, 207, 208–09, 208t
income growth and, 260
sustainable growth and, 187, 188
Prebisch-Singer hypothesis, 9–10, 25
Price index, as output- versus consumption-oriented, 24
Price insulation, 334–38
impact of, 338
Price stickiness, 73
Price volatility. See also Food price volatility
impact of, 319
international, 332–34
international policy challenge with, 328–29
as time persistent, 318
Price-taker assumption
conditions of, 9
flexible (food) price sector and, 77
Private investment, 92–94
Privatization
nationalization versus, 44–46
of natural resources, 16
Procyclical fiscal policy, 22–23
Procyclical spending, 19
Product price, consumer price index versus, 21
Product price targeting (PPT), 24
Productive employment, 149
inclusive growth and, 150b
for sustainable and inclusive growth, 156–57
Productivity shock
demand and
nontraded goods, 181
traded goods, 184–185
price increases and, 172, 172f
Progresa and Bolsa Familia, 215–16
Property rights, unenforceability of, 16–17
Pro-poor growth, absolute versus relative, 149
Public employment program, 217
Public Interest and Accountability Committee, 361, 362b
Public investment, 92–94
resource curse through, 98–99
volatility and, 96
Public Investment Management Index (PIMI), 92
Public spending
rechanneling in Asia, 288–89
smoothing of, 96
Publish What You Pay, 49
government reporting standards, 360
Put option, 302, 302f
cost comparison of, 304t
Maya, strike price of, 306
trading of, 311–12
R
Radio, respondents owning, 251f
Raw material demand, income versus, 9
Recession, low-income countries and, 58
Redistribution scheme, 149
Regional Information and Studies, Centre for, 362
Relative pro-poor growth, 149
Religious fractionalization, 198
Rent, resource extraction and, 88
Rent cycling theory, 14
Resource dependence, 20
Resource depletion, savings/investment policies for, 96, 98
Resource extraction. See also Extraction factor income and rents, 88
Resource wealth See Natural resource wealth
Resource-rich country
average schooling years in, 237f
bank deposits for, 232f
democracy, tendency of, 240, 240f, 241
diversification challenges for, 232–33
economic growth of, 2
examples of, 25
fiscal revenues and, 56–57
institutional capacity weakness in, 352
life expectancy/mortality rate in, 237f
mean domestic credit to private sector for, 232f
in MENA region
economic growth, 227
output fluctuations in, 235f
policy agenda, features of, 241
poverty in, 351
production structure in, 233f
revenue transparency and, 49
savings/investment policies for, 87–88
secrecy/social contract fragility, implications of, 352–353
Revenue
government and, 38–40
saving and investing, 90–91
volatility of, 95
Revenue boom, 38
Revenue decentralization, 44
Revenue stability, 46–48
Revenue transparency, expenditure versus, 50
Revenue Watch Institute, 49
Rice
nominal assistance coefficients and, 342–43
price increase for, 281
price index for, 344f
reserve management of, 289–90
Ti’s for, 344t
percentage changes, 343f
Rice price increase, 283f
Rice self-sufficiency, 287
Ring-fenced import duty exemption, 63 “Rule of thumb” consumer, 79
description of, 77
S
SAARC Food Security Reserve, 290
Salaried employee, defining, 274–75
Santiago Principles, 358–59
sovereign wealth funds and, 361
Saudi Arabia
annual growth/contribution to by sector/time period, 168–69, 168t
boom and bust by sector, 166–67, 167t
diversification and effects of, 169
GDP in economy and oil sector, 163–64, 163f
natural resource boom and, 161–62
oil boom in, 165–66, 166f
per capita real GDP in, 165, 165f
as price-taker, 9
structural change in [1970-86], 167t
Savings, resource depletion and, 98
Savings rate
convergence and, 90–91
from natural source revenues, 89
by region, 227f
Scale, government revenue and, 38
School-based feeding scheme, 63
Secrecy, government revenue and, 39–40
reducing, 48–50
Self-sufficiency initiative, 287–88
Services, access to
measures of, 249
natural resources, 250, 250f, 251–52
Seven Sisters, 45
Slutsky own-price elasticity of food, 74, 75f
Social contract, 354–55
Social heterogeneity, income distribution and, 198
Social safety net system, for low-income countries, 57
Solow-Swan-type balanced growth, 148
Source, government revenue and, 38
altering, 40
volatility and, 44–46
South East Asian Nations (ASEAN), 289–90
Sovereign Development Fund (SDF), 99
central bank and, 101–2
rules of, 100
Sovereign Resilience Fund (SRF), 99
central bank and, 101–2
purpose of, 100
Sovereign Wealth Fund Institute, transparency/accountability of government accounts, 114
Sovereign wealth fund (SWF), 112
establishment of, 24, 139
governance over, 363
rules for management of, 112–13
rules of, 99
transparency/accountability of, 114, 115f
Santiago Principles, 358–59
Stability
government revenue and, 39
in MENA region
boom-bust cycle, 234, 235–36
human capital/infrastructure investments, 236, 237–38
Stability and Growth Pact, 107
ceilings on government deficit and debt, 111–12
Stabilization fund, 46
Stabilization plan, elements of, 46
Standby Credit Facility, 219
Sticky price, 73
flexible price versus, 75–78
Strict core IT, 77, 78
welfare gain and, 79–80
Strict headline IT, 77
welfare gain and, 79, 79f
Strike price, of Maya put option, 306
Structural change, 148
growth sustainability and, 154
Subnational revenue fund, 44
Sub-Saharan Africa country. See also Africa commodity exports and poverty in, 206–7
commodity price volatility in, 205
employment in, 259, 260
growth incidence curves in, 253, 254f, 256
household consumption expenditures per capita, 263f
inclusive growth in, 245–67, 249
living standards survey characteristics for, 269t
macroeconomic, poverty, consumption aggregates in, 255t
poverty reduction in
determinants of, 207, 208–9, 208t
income growth and, 262
public employment program in, 217
savings rate in, 227f
working age population versus
employment ratio for, 261f
Super pro-poor policy, 152
Supply shock, 78
food and energy prices as, 72
Sustainability Framework, 350
Sustainable growth
difficulties with, 190, 192
diversification and, 161, 164
factors important to, 154
inclusive growth policies for, 150, 158
inequality and, 198
pace and pattern of growth for, 148
poverty reduction and, 187, 188
productive employment and, 156–57
Systematic inequality of opportunity, 148
T
Tanzania. See also Sub-Saharan Africa country
employed, definition of, 274–75
employment in, 260t
growth incidence curves in, 254f
household consumption determinants for, 257t
living standards survey characteristics for, 271t, 273t
macroeconomic, poverty, consumption aggregates in, 255t
working age population versus employment ratio for, 261f
Tax systems, for low-income countries, 57
Taxation
freedom from, 14
privatization and, 45
Television, respondents owning, 251f
Terms of trade, consumption inequality and, 213, 214f, 215
Terms-of-trade volatility
GDP growth volatility and, 212f
growth and, 211–13
Time inconsistency, 21–22
Total agricultural NRA, contributions by region, 348t
Trade barrier, 293
food price volatility and, 287
Trade distortion, food price surges and, 333–47
Trade liberalization
Asia and, 287–88
growth spells and, 195
Trade tax in region (Ti’s), for rice/wheat countries, 340
Tragedy of the commons, 16
Transparency, 48–50
civil society organizations and IFI role in, 350
commodity price volatility and, 354
EITI and, 241
GDP growth and copper pricing, 113
lack of, consequences of, 353
natural resource fund management and, 358–59
Natural Resources Charter guidelines for, 357–58
new technology for, 363
proposals for reform of fiscal rule for, 136
strengthening demand for, 361, 362
of SWF, 111f
Transparent sovereign wealth fund, establishment of, 24
Treaty of Breda, 15
U
Uganda. See also Sub-Saharan Africa country
employment in, 260t
Engel curves for food in, 262t
growth incidence curves in, 254f
household consumption determinants for, 257t
living standards survey characteristics for, 271t, 273t
macroeconomic, poverty, consumption aggregates in, 255t
working age population versus employment ratio for, 261f
Uganda Debt Network, 50
Unconstrained consumer, consumption versus aggregate demand of, 80–81
Undernourishment, population affected by, 320, 320f
Unemployment insurance, 216
United Kingdom, hills of growth in, 189f
United States
hills of growth in, 189f
as petroleum importer, 36
Unsustainability, anarchy and, 15–17
Unsustainable growth, inequality and, 187–202
Upbreak. See Growth upbreak
Urban employment, 260
Uruguay Round agreement, 340
Utilitarian framework, 90–91
V
Vector autoregression (VAR), 131
Vietnam
employment in, 260t
macroeconomic, poverty, consumption aggregates in, 255t
Volatility
economic growth and, 39
in MENA region, 225–41
W
Wage. See Income
Wage stickiness, 73
War. See also Civil war
in oil-producing regions, 38, 39f
Wealth, in MENA region, 227
Weather Risk Management Facility, 325
Welfare
evaluation of, 78–79
measures of, 247, 248
asset holdings and access to services, 248–49
consumption versus income, 252
household consumption, 252
NIPA versus survey data measures for, 248b
strict core IT policy and, 79
Welfare gain, 79
from alterative IT rules, 79f
West Texas Intermediate (WTI), 305b–6b
Wheat
nominal assistance coefficients and, 341–42
price increase for, 283, 283f
price index for, 344f
Ti’s for, 342t
percentage changes, 343f
World Bank, 22
Doing Business annual rating of, 93
low-income countries and, 66
poverty rates and, 58
transparency agenda, 350
World commodity, long-term trends of, 9–12
World Food Program, 290
agriculture risk management and, 325
World price, indexation of oil/mineral contracts to, 21–22
World Trade Organization (WTO), 342
WTI crude oil, 304
WTI put option, strike prices of, 307t
WTI-Maya spread/monthly correlation, 305b
Z
Zambia. See also Sub-Saharan Africa country
employed, definition of, 274–75
employment in, 260t
Engel curves for food in, 266t
growth incidence curves in, 254f
household consumption determinants for, 257t
living standards survey characteristics for, 271t, 273t
working age population versus employment ratio for, 261f