Contribution to Productivity or Pork Barrel?: The Two Faces of Infrastructure Investment

Olivier Cadot (), Lars-Hendrik Röller and Andreas Stephan ()

No 458, Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research

Abstract: This paper proposes a simultaneous-equation approach to the estimation of the contribution of transport infrastructure accumulation to regional growth. We model explicitly the political-economy process driving infrastructure investments; in doing so, we eliminate a potential source of bias in production-function estimates and generate testable hypotheses on the forces that shape infrastructure policy. Our empirical findings on a panel of France's regions over 1985-92 suggest that electoral concerns and influence activities were, indeed, significant determinants of the cross-regional allocation of transportation infrastructure investments. By contrast, we find little evidence of concern for the maximization of economic returns to infrastructure spending, even after controlling for pork-barrel.

Keywords: Growth; Infrastructure; Political economy; Lobbying; France (search for similar items in EconPapers)
JEL-codes: D72 D78 O40 (search for similar items in EconPapers)
Date: 2004
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Published in: Journal of Public Economics 90 (2006) 6-7

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Related works:
Working Paper: Contribution to Productivity or Pork Barrel? The Two Faces of Infrastructure Investment (2002)
Journal Article: Contribution to productivity or pork barrel? The two faces of infrastructure investment (2006)
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Persistent link: http://EconPapers.repec.org/RePEc:diw:diwwpp:dp458

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