Politico-Economic Determinants of the Crowding-in Effects of Public Investments in Developing Countries

Erdal Atukeren

No 06-126, KOF Working papers from KOF Swiss Economic Institute, ETH Zurich

Abstract: This study investigates the politico-economic determinants of the crowding-in effects of public investments in a cross-section of 25 developing countries for the 1975-2000 period using multivariate probit analysis. The estimation results show that public fixed capital investments may crowd in private investments, but this still depends on the developments in the economic, political, and legal environment of business in individual countries. As such, our findings capture the essence of the mixed results found in this literature well and shed further light on the conditions under which public investments are more likely (not) to crowd in private investments in developing countries.

Keywords: Public investment; crowding-in effects; environment of private business; institutions; rule of law; property rights (search for similar items in EconPapers)
JEL-codes: E62 H54 O11 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cwa, nep-dev, nep-mac and nep-pbe
Date: 2006-01
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Persistent link: http://EconPapers.repec.org/RePEc:kof:wpskof:06-126

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