Efficiency-Adjusted Public Capital and Growth

36 Pages Posted: 21 Sep 2011

See all articles by Sanjeev Gupta

Sanjeev Gupta

International Monetary Fund (IMF) - Fiscal Affairs Department

Alvar Kangur

International Monetary Fund (IMF)

Chris Papageorgiou

International Monetary Fund (IMF) - Research Department

Abdoul Aziz Wane

International Monetary Fund (IMF) - African Department

Date Written: September 2011

Abstract

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.

Keywords: Capital, Developing countries, Economic growth, Governance, Low-income developing countries, Public investment

Suggested Citation

Gupta, Sanjeev and Kangur, Alvar and Papageorgiou, Chris and Wane, Abdoul Aziz, Efficiency-Adjusted Public Capital and Growth (September 2011). IMF Working Papers, Vol. , pp. 1-35, 2011. Available at SSRN: https://ssrn.com/abstract=1930797

Sanjeev Gupta

International Monetary Fund (IMF) - Fiscal Affairs Department ( email )

700 19th Street, NW
Washington, DC 20431
United States

Alvar Kangur

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Chris Papageorgiou

International Monetary Fund (IMF) - Research Department ( email )

700 19th Street NW
Washington, DC 20431
United States

Abdoul Aziz Wane (Contact Author)

International Monetary Fund (IMF) - African Department ( email )

1700 19th Street, NW
Washington, DC 20431
United States

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