Study
| EST. READ TIME 1 MIN.Reforming Alberta's Heritage Fund: Lessons from Alaska and Norway
The governments of Alberta, Alaska, and Norway have all created funds in which to deposit some of the revenues they receive from non-renewable natural resource activities. Despite Alberta?s rich natural resource endowments, its Alberta Heritage Savings Trust Fund is smaller than the others because of its relative underfunding and because of chronic withdrawals of most income from the fund. This paper explores the history and structure of the three funds, and offers recommendations for reform in Alberta, including a formal rule for the contribution percentage and institutional mechanisms to encourage proper fund management.
The paper finds that if the Alberta government had consistently deposited 25 percent of its non-renewable resource revenues from 1982-2011?as the Alaskan constitution requires?total contributions would have been $42.4 billion, rather than the actual contributions of $9.1 billion during this period. And if the Alberta government had followed Norway?s example, and contributed 100 percent of its non-renewable resource revenues into its Heritage Fund, then from 1982-2011 total contributions would have been $169.5 billion, rather than $9.1 billion.
In order to fulfill its mission of preserving Alberta?s rich resource wealth for future generations, the government should seriously study the lessons from Alaska and Norway laid out in this study.
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Jason Clemens
Executive Vice President, Fraser Institute -
Robert P. Murphy
Senior Fellow, Fraser Institute
Robert P. Murphy is a Senior Fellow at the Fraser Institute and Chief Economist at Infineo and author of the widely acclaimed book,Choice: Cooperation, Enterprise, and Human Action. He is also a Senior Fellow with the Mises Institute. He received his Ph.D. in economics from New York University. Previous positions include Research Assistant Professor with the Free Market Institute at Texas Tech University, Visiting Assistant Professor of Economics at Hillsdale College, Senior Economist at the Institute for Energy Research, Visiting Scholar at New York University, Research Analyst at Laffer Associates, and Senior Fellow in Business and Economic Studies at the Pacific Research Institute. Prof. Murphy runs the blog, Free Advice and hosts the podcast, The Bob Murphy Show. He is the author of The Politically Incorrect Guide to Capitalism, The Politically Incorrect Guide to the Great Depression and the New Deal, The Study Guide to Man, Economy, and State with Power and Market, The Human Action Study Guide, The Study Guide to The Theory of Money & Credit by Ludwig von Mises, and Lessons for the Young Economist. He has also written hundreds of economics articles for the layperson, has given numerous radio and television interviews on such outlets as Fox Business and CNBC, and is active on Twitter (@BobMurphyEcon).… Read more