Assessment of Oil Rent of the Russian Federation

The article presents the position of the author, relating to such an important economic concept as oil rent. The oil rent of the country, estimated in the world economic space, is determined and considered. A mathematical model is presented that allows calculating such rent using available statistical information. The method of obtaining initial data is described and the results of specific applied calculations are given. The interpretation of oil rents as super-profits of oil companies, established in economic science, affects, according to the author, only a part of the economic benefits that the country receives by developing its oil fields. If we consider such deposits as a natural gift, then it is possible, according to the author, to estimate the full size of this gift only as a result of comparing the real situation with the virtual one, in which there are no such deposits or they are, but are not exploited. The result of such a comparison is considered in the article as the oil rent of the country, estimated in the world economic space. As an illustration, the results of calculations of the oil rent of the Russian Federation for 2011, 2013, 2015 and 2018 are given. А brief analysis of the results obtained and their dependence on external economic circumstances is given. For the purpose of comparison, the calculation of the oil rent of Saudi Arabia for 2018 is given.

The Asymmetric Impact of Oil Prices on Unemployment in the MENA Region

We examine the effects of oil prices on unemployment rates in the Middle East and North Africa (MENA) over the period of 1991–2017. Using the panel nonlinear autoregressive distributed lag (panel NARDL) model, the results show that in the long run, positive changes of oil prices exert a positive (increasing) impact on the unemployment rate. However, negative changes in oil prices have a significant decreasing effect on the unemployment rate in the MENA region. We also find that the short run changes in oil prices do not show a significant effect on unemployment rates. Our findings are robust to an alternative measure of oil rents per capita and in line with predictions of the resource curse hypothesis. Countries with higher dependency on natural resource rents experience, on average, a slower long run economic growth rate (and thus higher unemployment rates), compared with countries with lower dependency.

The Impact of Taxation Accounting of Value-Added-Tax in the Engineering of the Iraqi Economy

This study analyses the causes behind the difficulties encountered by Iraqi economy in rebuilding, provision of value added tax (VAT), formation and implementation effects in case of applying it to the Iraqi markets. In contrast to accounts that lay stress on Iraq’s statist past, we argue that the sustained decline in formal institutions and poor tax administration is the best explanation for Iraq’s economic decline. In addition to the selected micro-economic interventions, we recommend policies that more dependably and equitably distribute oil rents, such as a universal basic value added tax collection. Our recommendations thus contrast sharply with the approaches that emphasize a reduced role by the state. The aim is to facilitate the development of VAT model under conditions of lowered conflict and greater stability, a binding constraint on development for Iraqi economy. The development process for the VAT operational management in Iraqi markets. VAT operates as a transactional sales tax, often compliance in Iraqi market jurisdiction can be compromised where purchasers are a part of a scheme that operates a fraud mechanism or where supplies are made to consumers without any physical presence in destination countries. In this context, enforcement nexus must be reinforced through several mechanisms suggested in the literature.

Natural resources, institutions and the quality-adjusted human capital

PurposeThe purpose of this paper is to investigate the resource rents–quality-adjusted human capital nexus and the impact of quality of institutions.Design/methodology/approachFor a large data set of 161 countries for the period 1996–2018 (yearly and 4-year periods), fixed effect estimation method is applied to investigate the impact of resource rents on quality-adjusted human capital and the role of quality of institutions on this relationship.FindingsThe paper found little evidence on the negative, significant and direct impact of total resource rents on quality-adjusted human capital. However, the results show that the negative effect of resource rents can be mediated by the quality of institutions. This result is robust to a long list of controls, different specifications and estimation techniques, as well as several robustness checks. Therefore, institutional quality seems to play a critical role in determining the indirect impact of natural resources on human capital. Moreover, the obtained results demonstrate that this resource adverse effect depends on the type of resource rents; in particular, high dependency on oil rents in developing countries appears to harm human capital.Research limitations/implicationsThe paper shows that it is not obvious that total resource rents decrease human capital and found that the coefficient is no longer significant in the two-way fixed effects model. However, the analysis has emphasized the crucial role of political institutions in this relationship and has shown that countries with higher quality of institutions make the most of their resource rents transiting to a better human capital environment. This result is found to be robust to a list of controls, different specifications and estimation techniques, as well as several robustness checks. In addition, we demonstrate that not all resources affect human capital in the same way and found that oil rents have a significant negative effect on human capital. This is an important distinction since several countries are blessing from oil rents. From this we conclude that the effect of natural resources on human capital varies across different types of commodities. On the other hand, the interaction between institutions and the sub-categories of resource rents shows that oil rents can increase human capital only in developing countries with higher quality of institutions (above the threshold). This result is also still hold while using alternative measures of political institutions.Practical implicationsThe results in this paper have important policy implications. In particular, results highlight important heterogeneities in the role resource rents to the economy. As international commodity prices have shown high volatility in recent years, it is important for policy makers to understand the rents. Rents which are the difference between the price of a commodity and the average cost of producing it can have different effects in the economy, including the human capital. It is shown that in countries with low-quality institutions, natural resource rents negatively affect institutional quality, leading to conflicts, corruption and fostering rent-seeking activities. Overall, this reinforces the elite at the power that, obviously, is interested in preserving the status quo. In other words, there is a vicious circle between resource rents and low-quality institutions that impedes institutional change. How to regulate this in the best possible way requires a good understanding of how resource rents are generated and appropriated for different sectors, their different effects and how people react to these rents. The evidence suggests the policy toward better political institutions may help countries to improve social outcomes such as health and education which offer high social returns.Originality/valueThe paper is part of the author's PhD research and is an original contribution.

Fiscal Policy and Sudan’s 2005 Comprehensive Peace Agreement

Sudan’s 2005 Comprehensive Peace Agreement (CPA) came at a time when oil revenues had transformed Sudan’s economy, and it recognized that regional inequalities in development needed to be redressed for peace to be sustainable. The government used fiscal policy to address these inequalities, transferring significant amounts of the central government’s oil rents to state governments. It was mostly spent on wages for government officials, and the evidence reviewed here suggests that it did little to redress Sudan’s stark regional inequalities. This chapter argues that the CPA’s fiscal arrangements alone could not address the land crises that underlie the violence and stagnation in the Sudan’s deeply polarized peripheral states: that would require ambitious plans to draw the productive energies of the periphery into the national economy, centred on Khartoum.