RT Journal Article
SR Electronic
T1 The Fiscal Impact of Natural Resource Windfalls: Evidence from a Peruvian Natural Experiment
JF Land Economics
JO Land Econ
FD University of Wisconsin Press
SP 577
OP 598
DO 10.3368/le.95.4.577
VO 95
IS 4
A1 Corral, Leonardo
A1 Henderson, Heath
A1 Miranda, Juan Jose
YR 2019
UL http://le.uwpress.org/content/95/4/577.abstract
AB 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. (JEL H72, O13)