FEEM working papers "Note di lavoro" series
2015 .096

The Basilicata Wealth Fund: Resource Policy and Long-run Economic Development in Southern Italy


Authors: Roberto Iacono
Series: Climate Change and Sustainable Development
Editor: Carlo Carraro
Keywords: Exhaustible Natural Resources, Sovereign Wealth Fund, Regional Economy, Long-run Economic Development, Basilicata
JEL n.: O13, Q32, R11, R58

Abstract

This paper contributes to the growing political economy literature of within-country natural resources management, by proposing a new resource policy for the oil-rich southern Italian region of Basilicata. The policy proposal is to establish a (regional) wealth fund in which all the royalty revenues from non-renewable natural resource exploitation in Basilicata would be stored and fully converted into low-risk  financial assets. The scope is to give priority to long-run investments as to better exploit revenues from large-scale extraction of natural capital. Establishing a wealth fund at the regional sub-national level is a novel approach that can be applied to other resource-rich regions in the world. I label the fund as the Basilicata Wealth Fund (BWF). The BWF would be a regionally owned investment fund, however  independently administered from national authorities (for instance, as an independent legal entity under the jurisdiction of the Bank of Italy). In addition, the paper posits a transparent and clear-cut spending fiscal rule in order to let regional authorities use the resource revenues to finance economic policy. The clear advantage from the BWF would be the stronger focus on long-run economic development and the higher accountability, hence avoiding misuse of resource revenues for myopic fiscal spending.

***

Suggested citation: Iacono, R., (2015), 'The Basilicata Wealth Fund: Resource Policy and Long-run Economic Development in Southern Italy', Nota di Lavoro 96.2015, Milan, Italy: Fondazione Eni Enrico Mattei
 

Download file
Download PDF file

FEEM Update

Subscribe to stay connected.

Your personal data will be processed by Fondazione Eni Enrico Mattei. – data Controller – with the aim of emailing the FEEM newsletter. The use of Your email address is necessary for the implementation of the newsletter service. You are invited to read the Privacy Policy in order to obtain additional information about the protection of Your rights.

This Website uses technical cookies and cookie analytics, as well as “third party” profiling cookies.
If you close this banner or you decide to continue navigating on this Website, you express consent to the use of cookies. If you need additional information or you wish to express selective choices on the use of cookies, please refer to the   Cookie PolicyI agree