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Management of Oil Wealth Under the Permanent Income Hypothesis: The Case of São Tomé and Príncipe
Author:
Mr. Alonso A Segura Vasi
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Series:
IMF Working Papers
Volume/Issue:
Volume 2006: Issue 183
Language:
English
Publication Date:
01 Jul 2006
DOI:
https://doi.org/10.5089/9781451864434.001
ISBN:
9781451864434
ISSN:
1018-5941
Pages:
34
Keywords:
WP; oil wealth; São Tomé and Príncipe; government; oil resource; proceeds
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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This paper documents the protracted process of shaping the rules governing oil operations in São Tomé and Príncipe. It analyzes the institutional framework for oil sector development, which applies Milton Friedman's permanent income hypothesis to the management of oil resources. São Tomé and Príncipe is the first country in Africa to adopt this rule. Finally, the paper offers a preliminary quantitative analysis of the impact of oil sector development on government consumption and savings. It shows that the country's oil wealth could be significant, which would enable sustainable government consumption and intergenerational equity through a gradual buildup of the Permanent Fund for Future Generations.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund
Volume 2006: Issue 183