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Public Capital Maintenance, Decentralization, and US Productivity Growth

  • Sarantis Kalyvitis

    ()

    (Department of International and European Economic Studies, Athens University of Economics and Business, Athens, Greece)

  • Eugenia Vella

    (Department of International and European Economic Studies, Athens University of Economics and Business, Athens, Greece)

Data published by the US Congressional Budget Office show that over the last fifty years expenditures for infrastructure's operations and maintenance (O&M) have roughly equalled those for new capital. We use this data set to investigate the productive impact of public infrastructure spending, taking into account its composition for each government level. We find that a rise (fall) in infrastructure expenditures by states and localities (the federal government) would enhance future productivity growth and that the rise in state and local spending should mainly come from additional O&M outlays in the transport sector.

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Article provided by in its journal Public Finance Review.

Volume (Year): 39 (2011)
Issue (Month): 6 (November)
Pages: 784-809

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Handle: RePEc:sae:pubfin:v:39:y:2011:i:6:p:784-809
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  1. Iimi, Atsushi, 2005. "Decentralization and economic growth revisited: an empirical note," Journal of Urban Economics, Elsevier, vol. 57(3), pages 449-461, May.
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  11. Michael Bleaney & Norman Gemmell & Richard Kneller, 2001. "Testing the endogenous growth model: public expenditure, taxation, and growth over the long run," Canadian Journal of Economics, Canadian Economics Association, vol. 34(1), pages 36-57, February.
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  16. Dioikitopoulos, Evangelos V. & Kalyvitis, Sarantis, 2008. "Public capital maintenance and congestion: Long-run growth and fiscal policies," Journal of Economic Dynamics and Control, Elsevier, vol. 32(12), pages 3760-3779, December.
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