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The Performance of Public Investments During Fiscal Consolidation in Albania

Author

Listed:
  • Blerta Zilja

    () (Department of Accounting, Faculty of Economics, University of Tirana)

  • Manjola Naco

    () (Department of Accounting, Faculty of Economics, University of Tirana)

Abstract

Public Investments are generally accepted as one of the main factors which contribute in the economic growth of a country, despite that several studies bring evidences that these variables are not always strongly correlated to each other. However, the sensitivity of economic growth to Public Investments (PI) and the high level of budget funds spent from governments for capital expenditures have made the issue on PI in general and moreover the factors that influence on PI very important to researchers and public as well. This paper gives a broad insight of public investments performance in developed or developing countries over time, underlining several factors that have assessed this performance, focusing especially on the impact of fiscal consolidation. It brings the views of many authors over the fact whether the governments during fiscal consolidation, in order to control debt stock and the budget balance prefer to cut current expenditures or capital expenditures. Furthermore, it analyses how Albania has reacted during its periods of fiscal consolidation and which has been the behavior of different governments toward PI.

Suggested Citation

  • Blerta Zilja & Manjola Naco, 2013. "The Performance of Public Investments During Fiscal Consolidation in Albania," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 16(48), pages 241-258, June.
  • Handle: RePEc:rej:journl:v:16:y:2013:i:47:p:241-258
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    References listed on IDEAS

    as
    1. Jordi Galí & Roberto Perotti, 2003. "Fiscal policy and monetary integration in Europe," Economic Policy, CEPR;CES;MSH, vol. 18(37), pages 533-572, October.
    2. Blanchard, Olivier J & Giavazzi, Francesco, 2004. "Improving the SGP Through a Proper Accounting of Public Investment," CEPR Discussion Papers 4220, C.E.P.R. Discussion Papers.
    3. Ghate, Chetan & Zak, Paul J., 2002. "Growth of government and the politics of fiscal policy," Structural Change and Economic Dynamics, Elsevier, vol. 13(4), pages 435-455, December.
    4. Jakob Haan & Jan Sturm & Bernd Sikken, 1996. "Government capital formation: Explaining the decline," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 132(1), pages 55-74, March.
    5. van Dalen, Hendrik P & Swank, Otto H, 1996. "Government Spending Cycles: Ideological or Opportunistic?," Public Choice, Springer, vol. 89(1-2), pages 183-200, October.
    6. Galí, Jordi & Perotti, Roberto, 2003. "Fiscal Policy and Monetary Integration in Europe," CEPR Discussion Papers 3933, C.E.P.R. Discussion Papers.
    7. de Haan, Jakob & Sturm, Jan-Egbert, 1997. "Political and economic determinants of OECD budget deficits and government expenditures: A reinvestigation," European Journal of Political Economy, Elsevier, vol. 13(4), pages 739-750, December.
    8. Keen, Michael & Marchand, Maurice, 1997. "Fiscal competition and the pattern of public spending," Journal of Public Economics, Elsevier, vol. 66(1), pages 33-53, October.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    public investment; current expenditures; fiscal consolidation;

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • C54 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Quantitative Policy Modeling

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