Determinants of public capital spending in less-developed countries
Abstract
Abstract In a great majority of countries throughout the world productive government services have declined as percentage of GDP since the 1970s. In the macroeconomic literature this is often associated with the general productivity growth decline, suggesting an important role for infrastructure investment in economic growth. However, this also raises the question as of why public capital spending declined in so many countries. Surprisingly, hardly any research on this exists. This paper is one of the first attempts to fill this gap by testing various hypotheses that may explain the development of government capital spending using panel data for 123 non-OECD countries for the period 1970{1998. Politico-institutional variables, like ideology, political cohesion, political stability and political business cycles do not seem to be important when explaining government capital formation in less-developed economies. On the other hand, variables like public decits, private investment and foreign aid are significantly related to public capital spending.Download Info
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Paper provided by University of Groningen, CCSO Centre for Economic Research in its series CCSO Working Papers with number 200107.Length:
Date of creation: 2001
Date of revision:
Handle: RePEc:dgr:rugccs:200107
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Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Clémence Vergne, 2011.
"Democracy, Elections and Allocation of Public Expenditure in Developing Countries,"
Working Papers
halshs-00564572, HAL.
- Vergne, Clémence, 2009. "Democracy, elections and allocation of public expenditures in developing countries," European Journal of Political Economy, Elsevier, vol. 25(1), pages 63-77, March.
- Cl�mence VERGNE, 2006. "Democracy, Elections and Allocation of Public Expenditure in Developing Countries," Working Papers 200608, CERDI.
- Sanz, Ismael & Velazquez, Francisco J., 2007. "The role of ageing in the growth of government and social welfare spending in the OECD," European Journal of Political Economy, Elsevier, vol. 23(4), pages 917-931, December.
- Juan González Alegre, 2012. "An evaluation of EU regional policy. Do structural actions crowd out public spending?," Public Choice, Springer, vol. 151(1), pages 1-21, April.
- Toan Quoc Nguyen & Benedict J. Clements & Rina Bhattacharya, 2003. "External Debt, Public Investment, and Growth in Low-Income Countries," IMF Working Papers 03/249, International Monetary Fund.
- Grigoli, Francesco & Mills, Zachary, 2011. "Do high and volatile levels of public investment suggest misconduct ? the role of institutional quality," Policy Research Working Paper Series 5735, The World Bank.
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