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Public Infrastructures, Production Organizations, and Economic Development

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  • Kohei Daido

    (School of Economics, Kwansei Gakuin University)

  • Ken Tabata

    (School of Economics, Kwansei Gakuin University)

Abstract

We develop a political economy model of growth to examine economic development led by the interactions between an economic decision concerning a firm’s production technology (CRS vs IRS technology) and a political decision concerning public infrastructures. We show that multiple equilibrium growth paths occur due to differences in expectations regarding the quality of public infrastructures. These multiple paths illustrate why economies with poor initial conditions can catch up to and, furthermore, overtake economies with better initial conditions. Our result could explain the experiences of some East Asian countries where co-evolutions of public infrastructures and industrial transformations spurred economic development.

Suggested Citation

  • Kohei Daido & Ken Tabata, 2012. "Public Infrastructures, Production Organizations, and Economic Development," Discussion Paper Series 93, School of Economics, Kwansei Gakuin University, revised Aug 2012.
    • Handle: RePEc:kgu:wpaper:93
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    Cited by:

    1. Qiangsheng Mai & Mengting Bai & Le Li, 2022. "Study on the Dynamic Evolution and Regional Differences of the Level of High-Quality Economic and Social Development in China," Sustainability, MDPI, vol. 15(1), pages 1-15, December.
    2. Jose Pedro Pontes & Telmo Peixe, 2021. "On The Roots Of Underdevelopment:“Wrong Equilibrium” Or “Miscoordination”?," Working Papers REM 2021/0187, ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa.
    3. Pierre‐Richard Agénor & Barış Alpaslan, 2018. "Infrastructure And Industrial Development With Endogenous Skill Acquisition," Bulletin of Economic Research, Wiley Blackwell, vol. 70(4), pages 313-334, October.
    4. Best, Rohan & Burke, Paul J., 2018. "Electricity availability: A precondition for faster economic growth?," Energy Economics, Elsevier, vol. 74(C), pages 321-329.
    5. Diane Coyle, 2022. "Healthcare as social infrastructure: productivity and the UK NHS during and after Covid-19," Working Papers 017, The Productivity Institute.
    6. Timilsina,Govinda R. & Hochman,Gal & Song,Ze, 2020. "Infrastructure, Economic Growth, and Poverty : A Review," Policy Research Working Paper Series 9258, The World Bank.
    7. Rehak, David & Markuci, Jiri & Hromada, Martin & Barcova, Karla, 2016. "Quantitative evaluation of the synergistic effects of failures in a critical infrastructure system," International Journal of Critical Infrastructure Protection, Elsevier, vol. 14(C), pages 3-17.
    8. Herrera-Echeverri Hernán & Salazar-Duque Juan Guillermo & Haar Jerry, 2017. "Private Equity and Devaluation in Emerging Countries," Global Economy Journal, De Gruyter, vol. 17(1), pages 1-26, March.
    9. Daido, Kohei & Tabata, Ken, 2013. "Public infrastructure, production organization, and economic development," Journal of Macroeconomics, Elsevier, vol. 38(PB), pages 330-346.
    10. Armando J. Garcia Pires & José Pedro Pontes, 2021. "(De)Industrialization, Technology and Transportation," Open Economies Review, Springer, vol. 32(3), pages 527-538, July.
    11. Tim Hartwig & Trung Thanh Nguyen, 2022. "Local infrastructure, resilience capacity and poverty in rural Southeast Asia," TVSEP Working Papers wp-029, Leibniz Universitaet Hannover, Institute of Development and Agricultural Economics, Project TVSEP.

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    More about this item

    Keywords

    Public Infrastructure; Political Economy; Production Organization; Overlapping Generations Model;
    All these keywords.

    JEL classification:

    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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