The Effects of Oil and Mineral Taxation on Non-commodity Fiscal Revenues
This paper shows, first, that non-commodity revenues are more volatile in oil- and mineral-rich countries and that quality of institutions is associated with lower volatility. We investigate the channels through which oil and mineral revenue volatility lead to non-commodity revenues volatility, and find that when oil and fiscal revenues increase (decrease), non-commodity revenues are reduced (increased) discretionally, and that this substitution effect is larger and faster than an indirect positive income effect through increased public expenditures and GDP. Latin American oil- and mineral-rich countries appear, though, to behave differently. In particular, most of them show increased non-commodity revenues pari passu with increased oil and mineral revenues during the last decade. These findings have consequences for the overall volatility of public expenditures and the effectiveness of automatic tax stabilizers in oil- and mineral-rich countries.
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| Format: | Working Papers biblioteca |
| Language: | English |
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Inter-American Development Bank
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| Subjects: | Monetary Policy, Research and Development, Renewable Energy, Government Revenue, F43 - Economic Growth of Open Economies, H21 - Efficiency • Optimal Taxation, H25 - Business Taxes and Subsidies, H50 - National Government Expenditures and Related Policies: General, H63 - Debt • Debt Management • Sovereign Debt, O11 - Macroeconomic Analyses of Economic Development, Q30 - Nonrenewable Resources and Conservation: General, Q33 - Resource Booms, Natural resources, Windfall public revenues, Natural resource curse, Optimal fiscal policy, |
| Online Access: | http://dx.doi.org/10.18235/0011408 https://publications.iadb.org/en/effects-oil-and-mineral-taxation-non-commodity-fiscal-revenues |
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