Public Investment and Economic Performance in Highly Indebted Poor Countries: An Empirical Assessment

Marianna Belloc and Pietro Vertova

International Review of Applied Economics, 2006, vol. 20, issue 2, 151-170

Abstract: Understanding how public investment affects economic performance in highly indebted low-income countries is crucial in order to implement effective fiscal policies for adjustment with growth. In this paper we provide an empirical analysis to investigate the relationship between public investment, private investment and output. A dynamic econometric procedure is implemented on a selected group of Highly Indebted Poor Countries (HIPCs). Our results provide empirical support for the crowding-in hypothesis and a positive relation between public investment and output.

Keywords: Crowding-in; crowding-out; economic growth; fiscal adjustment; highly indebted countries; public investment (search for similar items in EconPapers)
Date: 2006
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Citations: View citations in EconPapers (18)

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DOI: 10.1080/02692170600581086

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