White Elephants and the Limits to Efficient Investment
AbstractThis paper studies a policymaker’s optimal choice between redistribution and efficient public investment. Under political instability, there is myopic government behavior which results in underinvestment. Above some critical value of political instability, it is optimal not to invest at all. This finding also suggests that it may be rational for governments to refrain from anti-corruption investment, even if they are not rent-seeking themselves.
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Bibliographic InfoPaper provided by School Of Economics, University College Dublin in its series Working Papers with number 200413.
Length: 21 pages
Date of creation: 23 May 2004
Date of revision:
political instability; myopic behavior; public investment; corruption; political economy; transition and developing countries;
Find related papers by JEL classification:
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
- O23 - Economic Development, Technological Change, and Growth - - Development Planning and Policy - - - Fiscal and Monetary Policy in Development
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