Macroeconomic Policies and Project Performance in the Social Sectors: A Model of Human Capital Production and Evidence from LDCS

World Development, Vol. 23, No. 5, pp. 751-765, May 1995

15 Pages Posted: 7 Apr 2008  

Daniel Kaufmann

Natural Resource Governance Institute (NRGI); The Brookings Institution

Yan Wang

The World Bank

Abstract

This paper investigates the relationship between economy-wide policies and the performance of investment projects in education and health sectors. The model highlights the fact that the production of human capital requires an interaction of the demand for and supply of social services, both are related to labor market conditions and macroeconomic policies. A Probit analysis shows that the probability of project failure is positively and significantly associated with indicators of macroeconomic instability and distortion; and negatively associated with the overall dynamism of the economy. Economy-wide policies therefore are crucial for the success of social projects, which underscores the need of linking the lending in the social sectors to the overall policies and reforms.

Suggested Citation

Kaufmann, Daniel and Wang, Yan, Macroeconomic Policies and Project Performance in the Social Sectors: A Model of Human Capital Production and Evidence from LDCS. Available at SSRN: https://ssrn.com/abstract=1116646

Daniel Kaufmann (Contact Author)

Natural Resource Governance Institute (NRGI) ( email )

80 Broad Street
New York, NY 10004
United States

HOME PAGE: http://www.resourcegovernance.org

The Brookings Institution ( email )

1775 Massachusetts Avenue, NW
Washington, DC 20036
United States

HOME PAGE: http://www.brookings.edu/experts/kaufmannd

Yan Wang

The World Bank ( email )

1818 H Street, N.W.
Room J3-061
Washington, DC 20433
United States
202-473-3219 (Phone)
202-676-9874 (Fax)

Paper statistics

Downloads
94
Rank
227,736
Abstract Views
779