White Elephants and the Limits to Efficient Investment

Frank Bohn

No 200413, Working Papers from School of Economics, University College Dublin

Abstract: This paper studies a policymaker’s optimal choice between redistribution and efficient public investment. Under political instability, there is myopic government behavior which results in underinvestment. Above some critical value of political instability, it is optimal not to invest at all. This finding also suggests that it may be rational for governments to refrain from anti-corruption investment, even if they are not rent-seeking themselves.

Keywords: Political instability; Myopic behavior; Public investment; Corruption; Political economy; Transition and developing countries (search for similar items in EconPapers)
JEL-codes: E62 O23 (search for similar items in EconPapers)
Pages: 14 pages
Date: 2004-05
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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http://hdl.handle.net/10197/6369 First version, 2004 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:ucn:wpaper:200413

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