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Private investment and economic growth in developing countries

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  • Reinhart, Carmen
  • Khan, Mohsin

Abstract

Despite the growing support for market-oriented strategies, and for a greater role of private investment, empirical growth models for developing countries typically make no distinction between the private and public components af investment. This paper sheds some light on this important issue by formulating a simple growth model that separates the effects of public sector and private sector investment. This model is estimated for a cross-section sample of 24 developing countries, and the results support the notion that private investment has a larger direct effect on growth than does public investment.

Suggested Citation

  • Reinhart, Carmen & Khan, Mohsin, 1989. "Private investment and economic growth in developing countries," MPRA Paper 13655, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:13655
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    References listed on IDEAS

    as
    1. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
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    4. Ichiro Otani & Delano Villanueva, 1989. "Theoretical Aspects of Growth in Developing Countries: External Debt Dynamics and the Role of Human Capital," IMF Staff Papers, Palgrave Macmillan, vol. 36(2), pages 307-342, June.
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    6. Sherman Robinson, 1971. "Sources of Growth in Less Developed Countries: A Cross-Section Study," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 85(3), pages 391-408.
    7. Mario I. Blejer & Mohsin S. Khan, 1984. "Government Policy and Private Investment in Developing Countries (Politique des pouvoirs publics et investissement privé dans les pays en développement) (Política estatal e inversión privada en lo," IMF Staff Papers, Palgrave Macmillan, vol. 31(2), pages 379-403, June.
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    More about this item

    Keywords

    growth investment public private productivity;

    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • E1 - Macroeconomics and Monetary Economics - - General Aggregative Models

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