Effect of Public Investment on Private Investment in Côte d’Ivoire: A Long-Term Analysis

Pierre Guei
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Pierre Guei: Department of Economics and Management, Université Péléforo Gon Coulibaly de Korhogo, Côte d’Ivoire DEECAF, Rennes, France

International Journal of Research and Innovation in Social Science, 2024, vol. 8, issue 7, 3402-3411

Abstract: Côte d’Ivoire has decided to boost private investment by increasing it to 30% of GDP, following a substantial reduction or even elimination of its debt. To achieve this, the authorities have opted to increase public investment through the construction of infrastructure and the development of Public-Private Partnerships (PPP). This strategy is based on the hypothesis of crowding-in effects, reflecting the positive impact of public investment on private investment. This article seeks to verify the existence of such effects in Côte d’Ivoire, within the framework of a dynamic analysis. The use of the Autoregressive Distributive Lag (ARDL) model, in the form of Error Correction Models (ECM), has made it possible to show crowding-out effects in both the short and long term. The results recommend redirecting public investment towards more productive sectors and call for caution in an increasing public investment.

Date: 2024
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