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The Fiscal Impact of Natural Resource Windfalls: Evidence from a Peruvian Natural Experiment

The Fiscal Impact of Natural Resource Windfalls: Evidence from a Peruvian Natural Experiment <p>ABSTRACT:</p><p>We study the local effect of natural resource windfalls by examining a Peruvian natural experiment. We exploit the rules governing the allocation of the Camisea Fund for Socioeconomic Development (FOCAM) to identify the effect of the associated transfers on municipal accounts, local infrastructure, and economic development. We find evidence of positive impacts on municipal capital expenditures and local infrastructure. We also find evidence of a negative impact on municipal current expenditures. Specifically, we find that municipalities with low absorptive capacity coped with the increased administrative burden of FOCAM transfers by reallocating administrative effort away from executing current expenditures.</p> http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Land Economics University of Wisconsin Press

The Fiscal Impact of Natural Resource Windfalls: Evidence from a Peruvian Natural Experiment

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Publisher
University of Wisconsin Press
Copyright
Copyright by the Board of Regents of the University of Wisconsin System.
ISSN
1543-8325

Abstract

<p>ABSTRACT:</p><p>We study the local effect of natural resource windfalls by examining a Peruvian natural experiment. We exploit the rules governing the allocation of the Camisea Fund for Socioeconomic Development (FOCAM) to identify the effect of the associated transfers on municipal accounts, local infrastructure, and economic development. We find evidence of positive impacts on municipal capital expenditures and local infrastructure. We also find evidence of a negative impact on municipal current expenditures. Specifically, we find that municipalities with low absorptive capacity coped with the increased administrative burden of FOCAM transfers by reallocating administrative effort away from executing current expenditures.</p>

Journal

Land EconomicsUniversity of Wisconsin Press

Published: Oct 14, 2019

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