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Efficiency-Adjusted Public Capital and Growth

Author/Editor: Sanjeev Gupta | Alvar Kangur | Abdoul Aziz Wane | Chris Papageorgiou
Authorized for Distribution: September 1, 2011
Electronic Access: Free Full Text (PDF file size is 822KB)
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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.
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Series: Working Paper No. 11/217
Subject(s): Developing countries | Economic growth | Governance | Low-income developing countries
Author's keyword(s): Public capital stock | public investment efficiency | appraisal | selection | implementation and evaluation of public investment | growth accounting.
    Published:   September 1, 2011        
    ISBN/ISSN:   9781463903503/1018-5941   Format:   Paper
    Stock No:   WPIEA2011217   Pages:   35
    Price:   US$18.00
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