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Role of Public Investment in Growth and Poverty Reduction in Transition Economies

Author

Listed:
  • Sanjaya Acharya

    (Oxford Policy Management, Kathmandu, Nepal)

  • Shamshimukhamed Nuriev

Abstract

This paper explores the linkages among public investment, growth and poverty in light of the existing theories, evidence and methods for 30 transition economies using the panel data for 1995-2010. Using Least Square Dummy Variable technique, we conclude that public investment is growth enhancing; furthermore, the impact is even higher if associated with foreign direct investment. However, public investment is still not strong enough to reduce poverty, poverty gap and inequality in income distribution. In case of the latter, it has rather worsening impact. But if public current expenditure is spent primarily on educational subsidies, this brings pro-poor growth impact.

Suggested Citation

  • Sanjaya Acharya & Shamshimukhamed Nuriev, 2016. "Role of Public Investment in Growth and Poverty Reduction in Transition Economies," Journal of Reviews on Global Economics, Lifescience Global, vol. 5, pages 310-326.
    • Handle: RePEc:lif:jrgelg:v:5:y:2016:p:310-326
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    File URL: http://www.lifescienceglobal.com/independent-journals/journal-of-reviews-on-global-economics/volume-5/85-abstract/jrge/2438-abstract-role-of-public-investment-in-growth-and-poverty-reduction-in-transition-economies
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    Citations

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    Cited by:

    1. Ewubare, Dennis Brown, 2019. "Impact of Economic Planning on Sustainable Development in Nigeria," Asian Development Policy Review, Asian Economic and Social Society, vol. 7(1), pages 12-22, March.
    2. Temirlan T. Moldogaziev & Rachel M. Krause & Gwen Arnold & Le Ahn Nguyen Long & Tatyana Ruseva & Chris Silvia & Christopher Witko, 2023. "Support for the environment post‐transition? Material concerns and policy tradeoffs," Review of Policy Research, Policy Studies Organization, vol. 40(2), pages 186-206, March.
    3. Iwasaki, Ichiro & 岩﨑, 一郎 & Tokunaga, Masahiro, 2019. "The Determinants and Macroeconomic Impacts of Foreign Direct Investment in Transition Economies," CEI Working Paper Series 2019-8, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.

    More about this item

    Keywords

    Public investment; Growth; Poverty; Transition economies.;
    All these keywords.

    JEL classification:

    • H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • P34 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Finance
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

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