Institutions Of Mining Revenue Distribution And Its Worldwide Comparison

Scarcity and exhaustibility are two basic characteristics of mineral resources, thus how themining revenue distributes and uses will affect the economic performance of resource-abundantregions: if institutions of mining revenue distribution are reasonable, mineral resources willpromote economic growth; if not, it will be in the "resource curse". Mining industry of China is inthe process of Marketization Reform, and the institution of mining revenue distribution still needsto be gradually improved. This paper uses Institution Providing, Quality, Execution, Efficacy of theanalytical framework to compare institutions of mining revenue distribution worldwide. We expect,on one hand, to theoretically enrich the framework of the Institutional Economics and the theory ofmining revenue distribution,on the other hand, to make some practical significance on the of theinstitutional innovation of mining revenue distribution.Based on the fundamental characteristics of resource-abundant regions, this paper apply theanalytical paradigm of the New Institutional Economics to theoretically explain the institutions ofmining revenue distribution of other countries, and thus to study the worldwide comparison: Firstly,this paper discusses the specific realization of private cost, social cost and stability fund, thethree-level institutions of income distribution in the mineral development at home and abroad, andtrying to build Institution Providing, Institution Quality, Institution Execution and InstitutionEfficacy, the four-level framework of institutional analysis; Secondly, Taking the framework ofinstitutional analysis as paradigm, this paper will make institutional evolutionary analysis on therealization form of mining revenue distribution to some typical resource-abundant countries; Finally,to Suggest that China should make some partial adjustments on its existing institutions of resourcetax and fee, and set up institutions of royalties and stability fund, and propose that we shouldpromote the foregoing institutional change through the four levels of the framework of institutionalanalysis.The main ideas of this paper can be summarized as follows:1. Taking the three-level institutions of mining revenue distribution as a model, this paperattempts to longitudinally extend the specific realization form of institutions of mining revenue distribution at home and abroad. Mineral exploration right price, mining right price and resource tax,mineral resource compensation in China belong to scarcity rent of the private costs, which is similarto the dividend and basic royalties in other countries;Exhaustible rent of the private costs and stability fund are still vacant in China, while othercountries respectively utilize net-revenue royalties (or excess profits tax) and stabilization fund (orthe permanent fund) to collect them.2. Try to propose the concept "framework of institutional analysis" that is applicable to themining revenue distribution. It covers four levels, that is, institution providing, institution quality,institution execution and institution efficacy. Compared with the institution providing governmentsforced to supply, the improvement of institution quality promoted by economic individuals willachieve a wider interests balance with high economic efficiency; Institution execution exertsinfluence on the difficulty of the institutional change through altering the transaction cost; Whetherthe institution efficacy can be realized depends on he decision-makers' preferences, mind,information and the external environment jointly.3. With the framework of institutional analysis, this paper makes evolution analysis oninstitutions of mineral revenue distribution in selected countries and regions, mainly including threeaspects, royalties, the tax structure and the stability fund.(1) The single royalty institution of theSouth Africa is embodied with both properties of scarcity and exhaustible rent, thus it needs torealize two aspects of the function orientation; The double royalty institution of lberta, Canada,whose advantage is respectively corresponding to scarcity rent and exhaustible rent, is easier tooperate and supervise than single royalty of South Africa; Russia's production sharing agreements(royalties category) ensure investment cost and risk earnings by weakening the royalties income ofowners, actually taking more emphasis on investment risk;(2) Mining tax reform of Papua NewGuinea, including giving accelerated depreciation allowance, cancelling capital gain tax andenterprise income tax reduced by5%, promotes the competition of domestic mining; Russia'scutting mining tax rates, changing algorithm of export tax rate and increasing profits tax, make taxcompliance of the oil enterprise improved;(3) The Norwegian stability fund transfers long-termreturns (about4%) to the annual national budget, meanwhile the strong trade union and the socialequality contract improve the institution execution. Thus Norway can control the price fluctuation of resources products and realize the intergenerational equity.4. Combined with the institution of mining revenue distribution and its evolution process inother countries, this paper proposes some references applicable for China.(1) combine theresources tax with the mineral resource compensation, combine the mineral exploration right fee,mining right fee with mining payments, and retain the mineral exploration right price, mining rightprice while increase the former rate;(2) establish double-layer royalties institution constituted bythe basic royalties (specific duty) and floating royalties (ad valorem), and implement stability fundinstitution taking the Norwegian model as a reference;(3) in the process of institutional change ofmining revenue distribution in China, we should reflect the institutional demand of localgovernment and economic individuals, focus on informal institutions such as the trade unions,social equality contract, collective action, make discretion utilization of the existing institutions ofmining revenue distribution, and establish investigation mechanism of tax compliance andemergency management mechanism of institutions of mining revenue distribution.