Efficiency-Adjusted Public Capital and Growth

Author/Editor:

Sanjeev Gupta ; Alvar Kangur ; Abdoul A Wane ; Chris Papageorgiou

Publication Date:

September 1, 2011

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

This paper constructs an efficiency-adjusted public capital stock series and re-examines the public capital and growth relationship for 52 developing countries. The results show that public capital is a significant contributor to economic growth. Although the estimated coefficient for the income share of public capital is larger in middle- than in low-income countries, the opposite is true for the marginal product of public capital. The quality of public investment, as measured by variables capturing the adequacy of project selection and implementation, are statistically significant in explaining variations in economic growth, a result mainly driven by low-income countries.

Series:

Working Paper No. 2011/217

Subject:

Capital productivity Econometric analysis Estimation techniques Expenditure Financial institutions Labor Production Public investment spending Stocks

English

Publication Date:

September 1, 2011

ISBN/ISSN:

9781463903503/1018-5941

Stock No:

WPIEA2011217

Pages:

35

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