Are Public Investment Efficient in Creating Capital Stock in Developing Countries?
Arestoff, Florence; Hurlin, Christophe (2010), Are Public Investment Efficient in Creating Capital Stock in Developing Countries?, Economics Bulletin, 30, 4, p. 3177-3187
TypeArticle accepté pour publication ou publié
Journal nameEconomics Bulletin
MetadataShow full item record
Abstract (EN)In many poor countries, the problem is not that governments do not invest, but that these investments do not create productive capital. So, the cost of public investments does not correspond to the value of the capital stocks. In this paper, we propose an original non parametric approach to evaluate the efficiency function that links variations (net of depreciation) of stocks to public investments. We consider four sectors (electricity, telecommunications, roads and railways) of two Latin American countries (Mexico and Colombia). We show that there is a large discrepancy between the amount of investments and the value of increases in stocks.
Subjects / KeywordsDeveloping Countries; Capital Stocks; Public Capital
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