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The Quality of Public Investment
Author:
Mr. Shankha Chakraborty
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Ms. Era Dabla-Norris
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Series:
IMF Working Papers
Volume/Issue:
Volume 2009: Issue 154
Language:
English
Publication Date:
01 Jul 2009
DOI:
https://doi.org/10.5089/9781451873016.001
ISBN:
9781451873016
ISSN:
1018-5941
Pages:
23
Keywords:
WP; Public Capital; Corruption; Public Investment; productivity effect; infrastructure investment; investment decision; low income; productivity difference; low-productivity project; value-enhancing investment; Public investment spending; Infrastructure; Income
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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This paper develops a growth model with specialized goods where inefficient and corrupt bureaucracies interact with the provision of public investment services in affecting the productivity of private capital, specialization, and growth. The model provides potential explanations for the contradictory empirical results on the effects of public investment found in the literature as well as for the role of the quality of public infrastructure investment in creating a gap between rich and poor countries. From a policy perspective, the paper suggests that the link between public investment and growth depends critically on the quality and efficiency of public capital.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund
Volume 2009: Issue 154