Private Investment and Economic Growth in Developing Countries

International Monetary Fund

No 1989/060, IMF Working Papers from International Monetary Fund

Abstract: Despite the growing support for market-oriented strategies, and for a greater role of private investment, empirical growth models for developing countries typically make no distinction between the private and public components of investment. This paper sheds some light on this important issue by formulating a simple growth model that separates the effects of public sector and private sector investment. This model is estimated for a cross - section sample of 24 developing countries, and the results support the notion that private investment has a larger direct effect on growth than does public investment.

Keywords: WP; investment; public sector investment; investment opportunity; investment variable; investment-growth relationship; productivity variable; investment-income ratio; Public investment spending; Private investment; Productivity; Labor force; Imports (search for similar items in EconPapers)
Pages: 20
Date: 1989-01-01
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Citations: View citations in EconPapers (4)

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