Governance, social infrastructure and productivity

I develop a neoclassical growth model in which the government accumulates contestable social infrastructure. In this framework, both a more accountable and more fairness governance encourages governmental accumulation of social infrastructure which fosters productivity. According to the calibrated model, for a country in the lower decile of the distribution of the index of social infrastructure, improving governance fairness by one standard deviation increases, on average, social infrastructure by 84% and GDP per worker by around 38%. However, the quantitative impact of improving governance accountability on social infrastructure and productivity is negligible.