A Political Economy Model of Infrastructure Allocation: An Empirical Assessment

Olivier Cadot, Lars-Hendrik Röller and Andreas Stephan

No 2336, CEPR Discussion Papers from C.E.P.R. Discussion Papers

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 1985-91 suggest that influence activities were, indeed, significant determinants of the cross-regional allocation of transportation infrastructure investments. Moreover, we find little evidence of concern for the maximization of economic returns to infrastructure spending, even after controlling for pork-barrel and when imposing an exogenous preference for convergence in regional productivity levels.

Keywords: France; Growth; Infrastructure; Lobbying; Political Economy (search for similar items in EconPapers)
JEL-codes: D72 D78 O40 (search for similar items in EconPapers)
Date: 1999-12
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Citations: View citations in EconPapers (45)

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Working Paper: A Political Economy Model of Infrastructure Allocation: An Empirical Assessment (1999)
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