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Public Investment and Economic Performance in Highly Indebted Poor Countries: An Empirical Assessment

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  • Marianna Belloc
  • Pietro Vertova

Abstract

Understanding how public investment affects economic performance in highly indebted low-income countries is crucial in order to implement effective fiscal policies for adjustment with growth. In this paper we provide an empirical analysis to investigate the relationship between public investment, private investment and output. A dynamic econometric procedure is implemented on a selected group of Highly Indebted Poor Countries (HIPCs). Our results provide empirical support for the crowding-in hypothesis and a positive relation between public investment and output.

Suggested Citation

  • Marianna Belloc & Pietro Vertova, 2006. "Public Investment and Economic Performance in Highly Indebted Poor Countries: An Empirical Assessment," International Review of Applied Economics, Taylor & Francis Journals, vol. 20(2), pages 151-170.
  • Handle: RePEc:taf:irapec:v:20:y:2006:i:2:p:151-170 DOI: 10.1080/02692170600581086
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    References listed on IDEAS

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    Cited by:

    1. de Souza, Joao Paulo A., 2014. "Growth Complementarity Between Agriculture and Industry: Evidence from a Panel of Developing Countries," UMASS Amherst Economics Working Papers 2014-11, University of Massachusetts Amherst, Department of Economics.
    2. International Monetary Fund, 2007. "Vietnam; Selected Issues," IMF Staff Country Reports 07/385, International Monetary Fund.
    3. Yoshino, Naoyuki & Abidhadjaev, Umid, 2015. "An Impact Evaluation of Investment in Infrastructure: The Case of the Railway Connection in Uzbekistan," ADBI Working Papers 548, Asian Development Bank Institute.
    4. Farla, Kristine & de Crombrugghe, Denis & Verspagen, Bart, 2016. "Institutions, Foreign Direct Investment, and Domestic Investment: Crowding Out or Crowding In?," World Development, Elsevier, vol. 88(C), pages 1-9.
    5. Yoshino, Naoyuki & Abidhadjaev, Umid, 2017. "An impact evaluation of investment in infrastructure: The case of a railway connection in Uzbekistan," Journal of Asian Economics, Elsevier, pages 1-11.
    6. 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.
    7. Alfredo M. Pereira & Jorge M. Andraz, 2013. "On The Economic Effects Of Public Infrastructure Investment: A Survey Of The International Evidence," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 38(4), pages 1-37, December.
    8. Chiara DEL BO, 2009. "Recent advances in public investment, fiscal policy and growth," Departmental Working Papers 2009-25, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
    9. Torrisi, Gianpiero, 2009. "Infrastructures and economic performance: a critical comparison across four approaches," MPRA Paper 18688, University Library of Munich, Germany.
    10. Naoyuki Yoshino & Umid Abidhadjaev, 2015. "An Impact Evaluation of Investment in Infrastructure : The Case of the Railway Connection in Uzbekistan," Working Papers id:7743, eSocialSciences.
    11. de Souza, Joao Paulo A., 2015. "Evidence of growth complementarity between agriculture and industry in developing countries," Structural Change and Economic Dynamics, Elsevier, vol. 34(C), pages 1-18.
    12. Yoshino, Naoyuki & Abidhadjaev, Umid, 2016. "Impact of Infrastructure Investment on Tax: Estimating Spillover Effects of the Kyushu High-Speed Rail Line in Japan on Regional Tax Revenue," ADBI Working Papers 574, Asian Development Bank Institute.

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