Infrastructure Investment and Maintenance Expenditure: Optimal Allocation Rules in a Growing Economy

Pierre-Richard Agénor

Centre for Growth and Business Cycle Research Discussion Paper Series from Economics, The University of Manchester

Abstract: This paper studies the allocation of public expenditure between infrastructure investment and maintenance in an endogenous growth framework. In the basic model maintenance affects both the durability and efficiency of public capital. The balanced growth path is derived and transitional dynamics associated with a revenue-neutral increase in spending on maintenance are analyzed. The growth-maximizing tax rate and share of infrastructure investment are then obtained. The model is then extended to account for the possibility that public spending on maintenance affects also the durability of private capital. Implications for optimal policies are also analyzed.

Pages: 30 pages
Date: 2005
New Economics Papers: this item is included in nep-dev
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://hummedia.manchester.ac.uk/schools/soss/cgb ... papers/dpcgbcr60.pdf (application/pdf)

Related works:
Journal Article: Infrastructure Investment and Maintenance Expenditure: Optimal Allocation Rules in a Growing Economy (2009)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:man:cgbcrp:60

Access Statistics for this paper

More papers in Centre for Growth and Business Cycle Research Discussion Paper Series from Economics, The University of Manchester Contact information at EDIRC.
Bibliographic data for series maintained by Patrick Macnamara (patrick.macnamara@manchester.ac.uk).