 Does public capital crowd out private capital?: evidence from IndiaNo 1613, Policy Research Working Paper Series from The World Bank Abstract: A recent but rapidly growing empirical literature focuses on the relationship between public and private capital. But for the most part, it ignores the heterogeneity of public investment. In many countries, especially in the developing world, public investmentincludes not only basic infrastructure projects, but also commercial and industrial projects similar to those undertaken by the private sector. And those two types of public investment are likely to have quite different effects on the accumulation of private capital. Using data from India, the author examines this issue empirically by implementing a simple analytical model encompassing two types of public capital. The empirical results show that in the long run capital for public infrastructure projects crowds in private capital - other types of public capital have the opposite effect. But in the short run, both kinds of public investment may crowd out private investment. Keywords: Inequality; Environmental Economics&Policies; Economic Theory&Research; Capital Markets and Capital Flows; Economic Stabilization; Banks&Banking Reform; Decentralization; International Terrorism&Counterterrorism (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:wbk:wbrwps:1613 Access Statistics for this paper More papers in Policy Research Working Paper Series from The World Bank 1818 H Street, N.W., Washington, DC 20433. Contact information at EDIRC. |
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