Efficiency-Adjusted Public Capital and Growth

By Sanjeev Gupta, Alvar Kangur, Abdoul A Wane, Chris Papageorgiou

September 1, 2011

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Sanjeev Gupta, Alvar Kangur, Abdoul A Wane, and Chris Papageorgiou. Efficiency-Adjusted Public Capital and Growth, (USA: International Monetary Fund, 2011) accessed November 21, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper constructs an efficiency-adjusted public capital stock series and re-examines the public capital and growth relationship for 52 developing countries. The results show that public capital is a significant contributor to economic growth. Although the estimated coefficient for the income share of public capital is larger in middle- than in low-income countries, the opposite is true for the marginal product of public capital. The quality of public investment, as measured by variables capturing the adequacy of project selection and implementation, are statistically significant in explaining variations in economic growth, a result mainly driven by low-income countries.

Subject: Capital productivity, Econometric analysis, Estimation techniques, Expenditure, Financial institutions, Labor, Production, Public investment spending, Stocks

Keywords: Appraisal, Capital productivity, Estimation techniques, Evaluation of public investment, Growth accounting, ICRG investment profile, Implementation, Investment effort, Investment process, Management process, Process carry, Production function, Public capital, Public capital stock, Public investment efficiency, Public investment spending, Selection, Stocks, WP

Publication Details

Pages:

35
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2011/217
Stock No:

WPIEA2011217
ISBN:

9781463903503
ISSN:

1018-5941

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