Rationality of Investment on White Elephants: The Case of Public Investments in Tourist Facilities in Mexico

Asian-African Journal of Economics and Econometrics, Vol. 7, No. 1, 2007

8 Pages Posted: 20 Nov 2006 Last revised: 6 Mar 2018

See all articles by Juan Gabriel Brida

Juan Gabriel Brida

Universidad de la República

Elvio Accinelli

Facultad de Economía de la Universidad Autónoma de San Luís Potosí

Edgar Javier Sanchez Carrera

University of Siena - Department of Economics

Lionello F. Punzo

Dept of Economics and Statistics; INCT/PPED

Date Written: November 2006

Abstract

In this paper we analyze the rationality that sustains the public investments on white elephants applied to the construction of tourist facilities in Mexico. The main result of this paper is that there exist two kinds of rationalities in the construction of white elephants. One is a similar rationality to that existent in the prisoner's dilemma, there is also a political rationality that involves politicians and social groups of individuals interested in exploiting tourist activities. If the winner of an electoral process is the same party that proposed the white elephant, then the construction is completed. Otherwise it is abandoned. This means that in the construction of white elephants, the political rationality prevails over economic rationality.

Keywords: Economic behavior, rationality of investment, white elephant, sustainable tourism

JEL Classification: H20, H50, H54, 020, L83

Suggested Citation

Brida, Juan Gabriel and Accinelli, Elvio and Sanchez Carrera, Edgar Javier and Punzo, Lionello F., Rationality of Investment on White Elephants: The Case of Public Investments in Tourist Facilities in Mexico (November 2006). Asian-African Journal of Economics and Econometrics, Vol. 7, No. 1, 2007. Available at SSRN: https://ssrn.com/abstract=945634 or http://dx.doi.org/10.2139/ssrn.945634

Juan Gabriel Brida (Contact Author)

Universidad de la República ( email )

Av. 18 de Julio
Montevideo, 1968
Uruguay

Elvio Accinelli

Facultad de Economía de la Universidad Autónoma de San Luís Potosí ( email )

Av. Pintores S/N
San Luis Potosí, San Luis Potosí 78263
Mexico
52444 8131238/120 (Phone)
52444 8131238 (Fax)

Edgar Javier Sanchez Carrera

University of Siena - Department of Economics ( email )

Piazza S. Francesco, 7
Siena, I-53100
Italy

Lionello F. Punzo

Dept of Economics and Statistics ( email )

Piazza S. Francesco, 7
Siena, I-53100
Italy
+390577232620 (Phone)
+390577232661 (Fax)

INCT/PPED ( email )

Av; Pasteur, 250
terreo - Bairro Maracana
Rio de Janeiro, Rio de Janeiro 23890000
Brazil

Register to save articles to
your library

Register

Paper statistics

Downloads
132
rank
210,834
Abstract Views
1,428
PlumX Metrics