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Reprint to: Infrastructure provision and macroeconomic performance

Listed author(s):
  • Chatterjee, Santanu
  • Mahbub Morshed, A.K.M.

This paper studies the differences between private and government provision of infrastructure. Capital utilization decisions and their differential role in determining market prices for capital goods under the two regimes of infrastructure provision serve as a critical transmission mechanism for fiscal policy. A subsidy to private providers of infrastructure is preferable to direct government provision irrespective of how the subsidy or expenditure is financed. The case for private provision is much stronger in economies characterized by high levels of congestion. The choice between private and government provision also has a crucial effect on the design of optimal fiscal policy.

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File URL: http://www.sciencedirect.com/science/article/pii/S0165188911001114
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Article provided by Elsevier in its journal Journal of Economic Dynamics and Control.

Volume (Year): 35 (2011)
Issue (Month): 9 (September)
Pages: 1405-1423

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Handle: RePEc:eee:dyncon:v:35:y:2011:i:9:p:1405-1423
Contact details of provider: Web page: http://www.elsevier.com/locate/jedc

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