Efficiency-Adjusted Public Capital and Growth - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Efficiency-Adjusted Public Capital and Growth write by Mr.Sanjeev Gupta. This book was released on 2011-09-01. Efficiency-Adjusted Public Capital and Growth available in PDF, EPUB and Kindle. 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.
Efficiency-Adjusted Public Capital, Capital Grants, and Growth
Efficiency-Adjusted Public Capital, Capital Grants, and Growth - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Efficiency-Adjusted Public Capital, Capital Grants, and Growth write by Ernesto Crivelli. This book was released on 2017-07-25. Efficiency-Adjusted Public Capital, Capital Grants, and Growth available in PDF, EPUB and Kindle. Recent literature has explored the relationship between efficiency-adjusted public capital and economic growth. A debate on whether capital grants, and especially EU funds actually contribute to growth has gained prominence lately. This paper empirically assesses the relationship between the quality of public investment, capital grants, and growth in a sample of 43 emerging and peripheral economies over 1991-2015. To this end, the contribution of public capital to growth is estimated using efficiency-adjusted public capital stock series, constructed reflecting the quality of public investment management institutions. In addition, the determinants of effective public investment are analyzed. The results suggest that capital grants contribute positively to effective public investment, and the latter is significant in explaining variations in economic growth. Finally, the paper illustrates the impact of raising EU funds absorption on potential growth in emerging and peripheral EU countries.
Assessing the Effect of Public Capital on Growth
Assessing the Effect of Public Capital on Growth - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Assessing the Effect of Public Capital on Growth write by Sharmila Devadas. This book was released on 2018. Assessing the Effect of Public Capital on Growth available in PDF, EPUB and Kindle. To analyze the effect of an increase in the quantity or quality of public investment on growth, this paper extends the World Bank's Long-Term Growth Model (LTGM), by separating the total capital stock into public and private portions, with the former adjusted for its quality. The paper presents the Long-Term Growth Model Public Capital Extension (LTGM-PC) and accompanying freely downloadable Excel-based tool. It also constructs a new Infrastructure Efficiency Index (IEI), by combining quality indicators for power, roads, and water as a cardinal measure of the quality of public capital in each country. In the model, public investment generates a larger boost to growth if existing stocks of public capital are low, or if public capital is particularly important in the production function. Through the lens of the model and utilizing newly-collated cross-country data, the paper presents three stylized facts and some related policy implications. First, the measured public capital stock is roughly constant as a share of gross domestic product (GDP) across income groups, which implies that the returns to new public investment, and its effect on growth, are roughly constant across development levels. Second, developing countries are relatively short of private capital, which means that private investment provides the largest boost to growth in low-income countries. Third, low-income countries have the lowest quality of public capital and the lowest efficient public capital stock as a share of gross domestic product. Although this does not affect the returns to public investment, it means that improving the efficiency of public investment has a sizable effect on growth in low-income countries. Quantitatively, a permanent 1ppt GDP increase in public investment boosts growth by around 0.1-0.2ppts over the following few years (depending on the parameters), with the effect declining over time.
Some Misconceptions about Public Investment Efficiency and Growth
Some Misconceptions about Public Investment Efficiency and Growth - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Some Misconceptions about Public Investment Efficiency and Growth write by Mr.Andrew Berg. This book was released on 2015-12-23. Some Misconceptions about Public Investment Efficiency and Growth available in PDF, EPUB and Kindle. We reconsider the macroeconomic implications of public investment efficiency, defined as the ratio between the actual increment to public capital and the amount spent. We show that, in a simple and standard model, increases in public investment spending in inefficient countries do not have a lower impact on growth than in efficient countries, a result confirmed in a simple cross-country regression. This apparently counter-intuitive result, which contrasts with Pritchett (2000) and recent policy analyses, follows directly from the standard assumption that the marginal product of public capital declines with the capital/output ratio. The implication is that efficiency and scarcity of public capital are likely to be inversely related across countries. It follows that both efficiency and the rate of return need to be considered together in assessing the impact of increases in investment, and blanket recommendations against increased public investment spending in inefficient countries need to be reconsidered. Changes in efficiency, in contrast, have direct and potentially powerful impacts on growth: “investing in investing” through structural reforms that increase efficiency, for example, can have very high rates of return.
The Quality of Public Investment
The Quality of Public Investment - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook The Quality of Public Investment write by Shankha Chakraborty. This book was released on 2009-07. The Quality of Public Investment available in PDF, EPUB and Kindle. This paper presents a simultaneous assessment of the relationship between economic performance and three groups of economic reforms: domestic finance, trade, and the capital account. Among these, domestic financial reforms, and trade reforms, are robustly associated with economic growth, but only in middle-income countries. In contrast, we do not find any systematic positive relationship between capital account liberalization and economic growth. Moreover, the effect of domestic financial reforms on economic growth in middle-income countries is explained by improvements in measured aggregate TFP growth, not by higher aggregate investment. We present evidence that variation in the quality of property rights helps explain the heterogeneity of the effectiveness of financial and trade reforms in developing countries. The evidence suggests that sufficiently developed property rights are a precondition for reaping the benefits of economic reform. Our results are robust to endogeneity bias and a number of alternative specifications.
