Middle East and Central Asia > Yemen, Republic of

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Mr. Saíd El-Naggar

Abstract

This volume, edited by Said El-Naggar, examines the impact of macro- and microeconomic policies on the investment climate in the Arab countries, the efficiency of public investment, and the role of foreign direct investment.

International Monetary Fund
This paper examines the empirical evidence on the contribution that government and, in particular, capital expenditure make to the growth performance of a sample of developing countries. Using the Denison growth accounting approach, this study finds that social expenditures may have a significant impact on growth in the short run, but infrastructure expenditures may have little influence. While current expenditures for directly productive purposes may exert a positive influence, capital expenditure in these sectors appears to exert a negative influence. Experiments with other explanatory variables confirm the importance of the growth of exports to the overall growth rate.