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Efficiency-Adjusted Public Capital and Growth

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  • Sanjeev Gupta
  • Alvar Kangur
  • Abdoul Aziz Wane
  • Chris Papageorgiou

Abstract

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.

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Bibliographic Info

Paper provided by International Monetary Fund in its series IMF Working Papers with number 11/217.

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Length: 35
Date of creation: 01 Sep 2011
Date of revision:
Handle: RePEc:imf:imfwpa:11/217

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Related research

Keywords: Developing countries; Economic growth; Governance; Low-income developing countries; public investment; capital stock; investment management; investment growth; investment flows; efficiency of capital; private capital; investment spending; capital accumulation; productive capital; capital inputs; private investment; increasing returns; capital increase;

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Citations

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Cited by:
  1. Frederick van der Ploeg, 2012. "Bottlenecks in Ramping Up Public Investment," OxCarre Working Papers 066, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.
  2. Patrick Carter, 2012. "Aid Allocation Rules," Bristol Economics Discussion Papers 12/630, Department of Economics, University of Bristol, UK.
  3. van der Ploeg, Frederick & Venables, Anthony J., 2010. "Absorbing A Windfall of Foreign Exchange: Dutch disease dynamics," CEPR Discussion Papers 8086, C.E.P.R. Discussion Papers.
  4. Bevan, David, 2012. "Aid, Fiscal Policy, Climate Change, and Growth," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  5. Agenor, Pierre-Richard & Dinh, Hinh T., 2013. "Social capital, product imitation and growth with learning externalities," Policy Research Working Paper Series 6607, The World Bank.
  6. Giovanni Melina & Yi Xiong, 2013. "Natural Gas, Public Investment and Debt Sustainability in Mozambique," IMF Working Papers 13/261, International Monetary Fund.
  7. Cavalcanti, Carlos B. & Marrero, Gustavo A. & Le, Tuan Minh, 2014. "Measuring the impact of debt-financed public investment," Policy Research Working Paper Series 6766, The World Bank.
  8. Issouf Samaké & Priscilla S. Muthoora & Bruno Versailles, 2013. "Fiscal Sustainability, Public Investment, and Growth in Natural Resource-Rich, Low-Income Countries," IMF Working Papers 13/144, International Monetary Fund.
  9. World Bank, 2012. "Global Economic Prospects, Volume 4, January 2012 : Uncertainties and Vulnerabilities," World Bank Publications, The World Bank, number 12100, October.
  10. Firew B Woldeyes, 2013. "Long-run Effects of Resource Rents in Developing Countries: The role of public investment management," OxCarre Working Papers 105, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.
  11. Francesco Grigoli Author-Email: fgrigoli@imf.org Author-Name: Eduardo Ley Author-Email: eley@worldbank.org, 2012. "Quality of Government and Living Standards," World Bank - Economic Premise, The World Bank, issue 89, pages 1-6, September.
  12. Ton S. van den Bremer & Frederick van der Ploeg, 2012. "How to Spend a Windfall: Dealing with volatility and capital scarcity," OxCarre Working Papers 085, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.
  13. Brahmbhatt, Milan, 2012. "Fiscal Policy for Growth and Development," World Bank - Economic Premise, The World Bank, issue 91, pages 1-7, October.
  14. Krasnopjorovs, Olegs, 2013. "Latvijas ekonomikas izaugsmi noteicošie faktori
    [Factors of Economic Growth in Latvia]
    ," MPRA Paper 47550, University Library of Munich, Germany.
  15. Vandycke, Nancy, 2013. "Natural resources, physical capital and institutions : evidence from Eurasia," Policy Research Working Paper Series 6586, The World Bank.
  16. Christine J. Richmond & Irene Yackovlev & Shu-Chun S. Yang, 2013. "Investing Volatile Oil Revenues in Capital-Scarce Economies," IMF Working Papers 13/147, International Monetary Fund.

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