IDEAS home Printed from https://ideas.repec.org/a/ksp/journ6/v3y2016i1p71-99.html
   My bibliography  Save this article

Analyzing Economic Growth: What Role for Public Investment?

Author

Listed:
  • Youssef OUKHALLOU

    (Mohammed V University, Morocco.)

Abstract

This paper discusses the role of public investment in the determination of output growth from different theoretical and empirical points of view. The light is shed on the factors that allegedly explain the success and/or the failure of public investment policies in enhancing productivity and supporting GDP, based on a review of empirical evidence in advanced and developing economies. The downstream objective is to provide decision makers with a set of general rules-of-thumb that are likely to help them improve the macroeconomic returns of public investment. The latter are found to be significantly influenced by efficiency and profitability-based selectivity of investment projects. Countries with a relatively low capital-labor ratio usually have higher public and private capital profitability, while the public-private investment substitutability increases the likelihood of crowding out effects. The paper also gives hints on the possible existence of an optimal growth-maximizing level of public investment.

Suggested Citation

  • Youssef OUKHALLOU, 2016. "Analyzing Economic Growth: What Role for Public Investment?," Journal of Economics Bibliography, KSP Journals, vol. 3(1), pages 71-99, March.
    • Handle: RePEc:ksp:journ6:v:3:y:2016:i:1:p:71-99
    as

    Download full text from publisher

    File URL: http://www.kspjournals.org/index.php/JEB/article/download/692/711
    Download Restriction: no
    File URL: http://www.kspjournals.org/index.php/JEB/article/view/692
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Stern, Nicholas, 1991. "The Determinants of Growth," Economic Journal, Royal Economic Society, vol. 101(404), pages 122-133, January.
    2. Sturm, Jan Egbert & de Haan, Jakob, 1995. "Is public expenditure really productive?: New evidence for the USA and The Netherlands," Economic Modelling, Elsevier, vol. 12(1), pages 60-72, January.
    3. T. W. Swan, 1956. "ECONOMIC GROWTH and CAPITAL ACCUMULATION," The Economic Record, The Economic Society of Australia, vol. 32(2), pages 334-361, November.
    4. Jonathan Temple, 1999. "The New Growth Evidence," Journal of Economic Literature, American Economic Association, vol. 37(1), pages 112-156, March.
    5. Mr. Andrew M. Warner, 2014. "Public Investment as an Engine of Growth," IMF Working Papers 2014/148, International Monetary Fund.
    6. Voss, Graham M., 2002. "Public and private investment in the United States and Canada," Economic Modelling, Elsevier, vol. 19(4), pages 641-664, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mouna MARZOUK & Youssef OUKHALLOU, 2017. "Fiscal policy and the Ricardian equivalence: Empirical evidence from Morocco," Journal of Economics Library, KSP Journals, vol. 4(3), pages 372-381, September.
    2. Andrew K. Kamenju & Dr. T. Olweny, 2021. "The Nexus Between Internal Investment and Economic Growth in Kenya," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 11(2), pages 1-2.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Oukhallou, Youssef, 2016. "Analyzing economic growth: what role for public investment?," MPRA Paper 69772, University Library of Munich, Germany.
    2. Minea, Alexandru, 2008. "The Role of Public Spending in the Growth Theory Evolution," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 5(2), pages 99-120, June.
    3. van de Klundert, T.C.M.J. & Smulders, J.A., 1991. "Reconstructing growth theory : A survey," Other publications TiSEM 19355c51-17eb-4d5d-aa66-b, Tilburg University, School of Economics and Management.
    4. Asongu, Simplice & Amavilah, Voxi & Andrés, Antonio R., 2014. "Economic Implications of Business Dynamics for KE-Associated Economic Growth and Inclusive Development in African Countries," MPRA Paper 63793, University Library of Munich, Germany.
    5. Ward Romp & Jakob De Haan, 2007. "Public Capital and Economic Growth: A Critical Survey," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 8(S1), pages 6-52, April.
    6. Christophe Kamps, 2006. "New Estimates of Government Net Capital Stocks for 22 OECD Countries, 1960-2001," IMF Staff Papers, Palgrave Macmillan, vol. 53(1), pages 1-6.
    7. Licia Ferranna & Margherita Gerolimetto & Stefano Magrini, 2016. "The effect of immigration on convergence dynamics in the US," Working Papers 2016:27, Department of Economics, University of Venice "Ca' Foscari".
    8. Derek Headey, 2008. "The Principal Components of Growth in the Less Developed Countries," Kyklos, Wiley Blackwell, vol. 61(4), pages 568-598, November.
    9. Arnab Bhattacharjee & Eduardo Castro & Chris Jensen-Butler, 2009. "Regional variation in productivity: a study of the Danish economy," Journal of Productivity Analysis, Springer, vol. 31(3), pages 195-212, June.
    10. repec:hal:spmain:info:hdl:2441/1181 is not listed on IDEAS
    11. Andreea Ocolișanu & Gabriela Dobrotă & Dan Dobrotă, 2022. "The Effects of Public Investment on Sustainable Economic Growth: Empirical Evidence from Emerging Countries in Central and Eastern Europe," Sustainability, MDPI, vol. 14(14), pages 1-25, July.
    12. Akram, Vaseem & Ali, Jabir, 2022. "Do countries converge in natural resources rents? Evidence from club convergence analysis," Resources Policy, Elsevier, vol. 77(C).
    13. Sajad Ahmad Bhat & Javed Ahmad Bhat & Taufeeq Ajaz, 2020. "The Public–Private Investment Nexus In India: Evidence From A Policy Simulation Approach," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 65(224), pages 101-128, January –.
    14. Xavier Sala-i-Martin, 2002. "15 Years of New Growth Economics : What Have we Learnt?," Journal Economía Chilena (The Chilean Economy), Central Bank of Chile, vol. 5(2), pages 5-15, August.
    15. Jochen Hartwig, 2009. "A panel Granger-causality test of endogenous vs. exogenous growth," KOF Working papers 09-231, KOF Swiss Economic Institute, ETH Zurich.
    16. Cem Ertur & Julie Le Gallo & Catherine Baumont, 2006. "The European Regional Convergence Process, 1980-1995: Do Spatial Regimes and Spatial Dependence Matter?," International Regional Science Review, , vol. 29(1), pages 3-34, January.
    17. Lecocq, Franck & Shalizi, Zmarak, 2007. "How might climate change affect economic growth in developing countries ? a review of the growth literature with a climate lens," Policy Research Working Paper Series 4315, The World Bank.
    18. Luisa Corrado & Ron Martin & Melvyn Weeks, 2004. "Identifying And Interpreting Convergence Clusters Across Europe," Royal Economic Society Annual Conference 2004 145, Royal Economic Society.
    19. Syed Ammad & Qazi Masood Ahmed, 2014. "Dynamic Effects of Energy Sector Public Investment on Sectoral Economic Growth: Experience from Pakistan Economy," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 53(4), pages 403-421.
    20. Raul A. Barreto & Anthony W. Hughes, 2004. "Under Performers and Over Achievers: A Quantile Regression Analysis of Growth," The Economic Record, The Economic Society of Australia, vol. 80(248), pages 17-35, March.
    21. Yin-Wong Cheung & Antonio Garcia Pascual, 2004. "Testing for output convergence: a re-examination," Oxford Economic Papers, Oxford University Press, vol. 56(1), pages 45-63, January.

    More about this item

    Keywords

    GDP growth; Public investment; Productivity; Private investment; Development.;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ksp:journ6:v:3:y:2016:i:1:p:71-99. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Bilal KARGI (email available below). General contact details of provider: http://www.kspjournals.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.