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Efficiency-Adjusted Public Capital and Growth

Sanjeev Gupta, Alvar Kangur, Abdoul Wane and Chris Papageorgiou

No 2011/217, IMF Working Papers from International Monetary Fund

Abstract: This paper constructs an efficiency-adjusted public capital stock series and re-examines the public capital and growth relationship for 52 developing countries. The results show that public capital is a significant contributor to economic growth. Although the estimated coefficient for the income share of public capital is larger in middle- than in low-income countries, the opposite is true for the marginal product of public capital. The quality of public investment, as measured by variables capturing the adequacy of project selection and implementation, are statistically significant in explaining variations in economic growth, a result mainly driven by low-income countries.

Keywords: WP; production function; public capital; Public capital stock; public investment efficiency; appraisal; selection; implementation; evaluation of public investment; growth accounting; investment process; ICRG investment profile; process carry; investment effort; management process; Public investment spending; Stocks; Capital productivity; Estimation techniques (search for similar items in EconPapers)
Pages: 35
Date: 2011-09-01
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Citations: View citations in EconPapers (42)

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Journal Article: Efficiency-Adjusted Public Capital and Growth (2014) Downloads
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Handle: RePEc:imf:imfwpa:2011/217