Abstract

This paper introduces a novel resource policy for the resource-rich Southern Italian region of Basilicata. This policy consists of establishing a regional wealth fund, the Basilicata Wealth Fund, according to which royalty revenues from natural resources in Basilicata can be stored as low-risk financial assets in order to sustain future regional expenditures. The paper pins down and simulates the dynamics of a set of fiscal expenditure rules. The Basilicata Wealth Fund fosters transparency accountability as regards fiscal spending, hence avoiding misuse of resource revenues.