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Public investment in local road infrastructure and economic growth in Benin: A dynamic analysis

Author

Listed:
  • Modeste Dedehouanou

    (FASEG/Université de PARAKOU (Benin))

  • Bernard Hounmenou

    (FASEG /Université d'Abomey Calavi (Bénin))

  • Louis Tchonkloe

    (FASEG/Université de Parakou (Bénin))

Abstract

This study examines the effect of local public investment on economic growth in Benin, with particular emphasis on the role of local road transport infrastructure. From a theoretical perspective, the analysis is grounded in Barro's (1990) endogenous growth model, which incorporates the externalities of public infrastructure spending through a production function combining private and public capital. Empirically, vector autoregressive (VAR) models are employed to assess the impact of public investment in local road infrastructure on economic growth using data covering the period 1993–2023. The results indicate that the contribution of public expenditure excluding local road infrastructure investment to economic growth is greater than that of public investment in local road infrastructure. Nevertheless, local road infrastructure investment has a positive and significant effect on economic growth in the long run. In turn, higher economic growth increases government tax revenues, thereby enhancing the government's capacity to invest in local road infrastructure. Consequently, improving the business climate through the development of local infrastructure appears to be a key driver of economic growth.

Suggested Citation

  • Modeste Dedehouanou & Bernard Hounmenou & Louis Tchonkloe, 2026. "Public investment in local road infrastructure and economic growth in Benin: A dynamic analysis," Economics Bulletin, AccessEcon, vol. 46(1), pages 168-183.
    • Handle: RePEc:ebl:ecbull:eb-25-00428
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    Keywords

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    JEL classification:

    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations
    • H5 - Public Economics - - National Government Expenditures and Related Policies

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