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Contribution to productivity or pork barrel? The two faces of infrastructure investment

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  • Cadot, Olivier
  • Roller, Lars-Hendrik
  • Stephan, Andreas

Abstract

This paper proposes a simultaneous-equation approach to the estimation of the contribution of transport infrastructure accumulation to regional growth. We model explicitly the political-economy process driving infrastructure investments; in doing so, we eliminate a potential source of bias in production-function estimates and generate testable hypotheses on the forces that shape infrastructure policy. Our empirical findings on a panel of France's regions over 1985-92 suggest that electoral concerns and influence activities were, indeed, significant determinants of the cross-regional allocation of transportation infrastructure investments. By contrast, we find little evidence of concern for the maximization of economic returns to infrastructure spending, even after controlling for pork-barrel.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Public Economics.

Volume (Year): 90 (2006)
Issue (Month): 6-7 (August)
Pages: 1133-1153

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Handle: RePEc:eee:pubeco:v:90:y:2006:i:6-7:p:1133-1153

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Web page: http://www.elsevier.com/locate/inca/505578

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