The Contribution of Local Public Infrastructure to Private Productivity and Its Political Economy: Evidence from a Panel of Large German Cities
AbstractThis paper proposes a simultaneous-equation approach to the estimation of the contribution of infrastructure accumulation to private production. A political economy model for the allocation of public infrastructure investment grants is formulated. Our empirical findings, using a panel of large German cities for the years 1980,1986, and 1988, suggest that cities ruled by a council sharing the State ("Bundesland") government's current political affiliation were particularly successful in attracting infrastructure investment grants. With regard to the contribution of infrastructure accumulation to growth, we find that public capital is a significant factor in private production. Moreover, at least for the sample studied, we find that simultaneity between output and public capital is weak; thus, feedback effects from output to infrastructure are negligible. Copyright 2002 by Kluwer Academic Publishers
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Bibliographic InfoArticle provided by Springer in its journal Public Choice.
Volume (Year): 113 (2002)
Issue (Month): 3-4 (December)
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Web page: http://www.springerlink.com/link.asp?id=100332
Other versions of this item:
- Achim Kemmerling & Andreas Stephan, 2001. "The Contribution of Local Public Infrastructure to Private Productivity and Its Political-Economy: Evidence from a Panel of Large German Cities," CIG Working Papers FS IV 01-14, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
- O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
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