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Private Costs and Public Infrastructure: The Mexican Case
Author:
Mr. Russell D. Murphy null

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Mr. Andrew Feltenstein
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Series:
IMF Working Papers
Volume/Issue:
Volume 2001: Issue 164
Language:
English
Publication Date:
01 Oct 2001
DOI:
https://doi.org/10.5089/9781451857993.001
ISBN:
9781451857993
ISSN:
1018-5941
Pages:
35
Keywords:
WP; Mexico; public infrastructure; private sector cost; elasticity estimate; infrastructure stock; cost reduction; OLS estimate; translog cost model; Infrastructure; Transportation; Stocks; Communications in revenue administration; Public investment spending
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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One objective of government investment is to develop public infrastructure which may reduce private sector costs. In a developing economy, the scope for payoffs to investments of this sort may be particularly large. A major concern related to the recent fiscal adjustment in Mexico is that it has been carried out, in part, by depleting public infrastructure stocks.We estimate the effects of public infrastructure on private sector costs in Mexico and calculate the implied optimal infrastructure stocks. Our estimates indicate that previous results suggesting a large productive role of public infrastructure capital are not robust. There is little evidence that public infrastructure plays a large role in reducing private sector costs.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund