White Elephants and the Limits to Efficient Investment
This paper studies a policymaker’s optimal choice between redistribution and efficient public investment. Under political instability, there is myopic government behavior which results in underinvestment. Above some critical value of political instability, it is optimal not to invest at all. This finding also suggests that it may be rational for governments to refrain from anti-corruption investment, even if they are not rent-seeking themselves.
|Date of creation:||23 May 2004|
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"Does corruption grease or sand the wheels of growth?,"
ULB Institutional Repository
2013/7364, ULB -- Universite Libre de Bruxelles.
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