Determinants of public expenditure on infrastructure : transportation and communication
The authors empirically study factors that influence public investment in transportation and communication infrastructure. Using data for 1980-86 for 27 economies, they assess the influence of government objectives, the nature of the domestic economy, and the external assistance flow on public infrastructure spending. They find: a) per capita spending on infrastructure responds most strongly to changes in development level, urbanization rate, and labor force participation rate; b) spending is greater in countries with large foreign sectors and is positively influenced by sectoral imbalances between rural and urban areas; c) if total foreign savings flows increase, there is a small positive per capita spending response; d) with higher population densities, consolidated government spending declines although it rises initially; e) central budget spending is positively associated with improved institutional development, while consolidated budget is negatively associated; f) budget deficit size appears not to influence central budget spending but is positively associated with consolidated budget spending; g) greater outward orientation is positively associated with increased consolidated budget spending but seems to bear no relationship to central budget spending on infrastructure; and h) governments that are either not at all or extremely committed to alleviating poverty spend less on infrastructure. Governments with a limited commitment to poverty alleviation adopt strategies to increase the poor's productivity by investing in infrastructure. As the commitment intensifies, their strategy shifts to improving human capital or strengthening the social safety net, and funding for those social programs competes with funding for developing infrastructure.
|Date of creation:||31 Oct 1996|
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- Kessides, C., 1993. "Institutional Options for Provision of Infrastructure," World Bank - Discussion Papers 212, World Bank.
- Aschauer, David Alan, 1989.
"Is public expenditure productive?,"
Journal of Monetary Economics,
Elsevier, vol. 23(2), pages 177-200, March.
- David Aschauer, 1988. "Is public expenditure productive?," Staff Memoranda 88-7, Federal Reserve Bank of Chicago.
- Joshua Greene & Delano Villanueva, 1991. "Private Investment in Developing Countries: An Empirical Analysis," IMF Staff Papers, Palgrave Macmillan, vol. 38(1), pages 33-58, March.
- Cardoso, Eliana, 1993. "Private Investment in Latin America," Economic Development and Cultural Change, University of Chicago Press, vol. 41(4), pages 833-848, July.
- Chen, Shaohua & Datt, Gaurav & Ravallion, Martin, 1994. "Is Poverty Increasing in the Developing World?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 40(4), pages 359-376, December.
- Shaohua Chen & Datt, Gaurav & Ravallion, Martin, 1993. "Is poverty increasing in the developing world?," Policy Research Working Paper Series 1146, The World Bank.
- Shantayanan Devarajan & Vinaya Swaroop & Heng-fu Zou, 1993. "What do governments buy?," CEMA Working Papers 513, China Economics and Management Academy, Central University of Finance and Economics.
- Baffes, John & Shah, Anwar, 1998. "Productivity of Public Spending, Sectoral Allocation Choices, and Economic Growth," Economic Development and Cultural Change, University of Chicago Press, vol. 46(2), pages 291-303, January.
- Baffes, John & Shah, Anwar, 1993. "Productivity of public spending, sectoral allocation choices, and economic growth," Policy Research Working Paper Series 1178, The World Bank.
- Khan, Haider Ali & Hoshino, Eiichi, 1992. "Impact of foreign aid on the fiscal behavior of LDC governments," World Development, Elsevier, vol. 20(10), pages 1481-1488, October.
- Kessides, C., 1993. "The Contributions of Infrastructure to Economic Development, A review of Experience and Policy Implications," World Bank - Discussion Papers 213, World Bank.
- Leff, Nathaniel H, 1984. "Externalities, Information Costs, and Social Benefit-Cost Analysis for Economic Development: An Example from Telecommunications," Economic Development and Cultural Change, University of Chicago Press, vol. 32(2), pages 255-276, January.
- Musalem, Alberto R., 1989. "Private investment in Mexico : an empirical analysis," Policy Research Working Paper Series 183, The World Bank.
- David Alan Aschauer, 1990. "Highway capacity and economic growth," Economic Perspectives, Federal Reserve Bank of Chicago, issue Sep, pages 14-24. Full references (including those not matched with items on IDEAS)
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