Abstract
Do the sovereign wealth funds of Kazakhstan and Azerbaijan promote the sustainable use of government oil revenues? We review the operational rules and performance of the two funds and compare them to Norway's Government Pension Fund – Global. The key challenges are to stabilize government expenditures despite volatile resource prices, build up a capital stock to draw on after the resource is depleted, and to save and spend resource revenues transparently. We conclude that the institutional framework of a resource fund may indeed enhance transparency and public scrutiny, limit discretionary control, and sustain public support for long-term savings of resource revenues.
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Notes
Auty (2006) develops more detailed scenarios for the use of oil rents in Azerbaijan and Kazakhstan.
Kalyuzhnova (2006) provides an early detailed analysis of the institutional framework and performance of the resource funds in Kazakhstan and Azerbaijan.
Kalyuzhnova (2010) discusses recent developments at the NFRK in detail.
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Acknowledgements
The editor of this journal, a referee, and Yelena Kalyuzhnova have all provided helpful comments. Research assistance by Till Seuring is gratefully acknowledged. The author is responsible for all remaining errors. This article is based on research funded by the Volkswagen Foundation under its initiative ‘Between Europe and the Orient – A Focus on Research and Higher Education in/on Central Asia and the Caucasus’.
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Luecke, M. Stabilization and Savings Funds to Manage Natural Resource Revenues: Kazakhstan and Azerbaijan versus Norway. Comp Econ Stud 53, 35–56 (2011). https://doi.org/10.1057/ces.2010.28
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DOI: https://doi.org/10.1057/ces.2010.28