Management of oil wealth under the permanent income hypothesis
Subtitle: the case of São Tomé and Príncipe
By: prepared by Alonso Segura.
Contributors: International Monetary Fund. African Dept.
Series: IMF working paper -- WP/06/183
Publisher: International Monetary Fund, African Dept.
Published: 2006
Place of publication: [Washington, D.C.]
Language: eng
Number of pages: 32
Subjects: Petroleum industry and trade -- Economic aspects -- Sao Tome and Principe.; Petroleum industry and trade -- Sao Tome and Principe -- Management.
Description: This paper documents the protracted process of shaping the rules governing oil operations in São Tomé and Príncipe. It analyzes the institutional framework for oil sector development, which applies Milton Friedman's permanent income hypothesis to the management of oil resources. São Tomé and Príncipe is the first country in Africa to adopt this rule. Finally, the paper offers a preliminary quantitative analysis of the impact of oil sector development on government consumption and savings. It shows that the country's oil wealth could be significant, which would enable sustainable government consumption and intergenerational equity through a gradual buildup of the Permanent Fund for Future Generations.
Notes: Caption title.

"July 2006."

Includes bibliographical references (p. 30-32).