Comparison of the productivity of public capital by project type: Central-government, subsidized-local, and unsubsidized-local projects in Japan

Keigo Kameda, Zhenkun Lu and Masaki Fukui

Japan and the World Economy, 2022, vol. 61, issue C

Abstract: Using a panel of Japanese regional data from 1960 to 2003, we estimated the production effect of public capital formed through three types of government projects: (1) projects directly implemented by the central government (central-government projects), (2) projects that are implemented by local governments but induced through subsidies by the central government (subsidized-local projects), and (3) projects that are implemented by local governments without central subsidies (unsubsidized-local projects). The results showed that the unsubsidized-local projects were the most productive among the three types. In addition, the subsidized-local projects were found to be the least productive, being less effective than the central projects. This may suggest the existence of inefficiency factors that central subsidization for local projects entails under the Japanese system of intergovernmental transfers.

Keywords: Public capital; Productivity; Project category; Non-stationarity; Decentralization (search for similar items in EconPapers)
JEL-codes: H54 H60 R53 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:japwor:v:61:y:2022:i:c:s0922142522000056

DOI: 10.1016/j.japwor.2022.101119

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