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Successful Transitions from Public to Private-Sector Led Growth: Lessons for Benin
Author:
Aissatou Diallo
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Series:
IMF Working Papers
Volume/Issue:
Volume 2021: Issue 286
Language:
English
Publication Date:
03 Dec 2021
DOI:
https://doi.org/10.5089/9781589068544.001
ISBN:
9781589068544
ISSN:
1018-5941
Pages:
28
Keywords:
Private and public investment; growth; transition; fiscal consolidation; lessons; expansionary fiscal consolidation literature; investment-led growth; identified policy; scaling-up program; investment scaling-up; Private investment; Public investment spending; Fiscal consolidation; Infrastructure; Global; Sub-Saharan Africa
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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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Many Sub-Saharan African (SSA) countries, like Benin, have scaled up public investment during the last decade. Such a strategy contributed to the improvement of infrastructure, but also to a build-up of debt vulnerabilities. Looking forward, the planned fiscal consolidation will result in some restraint of public spending, and, in particular, public investment. In this context, maintaining or even raising the region’s economic growth will require an offset by the private sector. The analysis draws lessons from countries that have successfully transitioned from public investment to private investment-led growth using a global sample starting in the mid-1980s. These lessons highlight policies that have been crucial in fostering a rebound of private investment in the wake of a contraction of public investment. The analytical framework proposed by Hausman, Rodrik and Velasco (2005) is used to identify and classify such policies. Finally, the paper analyses how the identified policies could help Benin achieving a smooth transition from public to private sector-led growth.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund