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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

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Type
Article accepté pour publication ou publié
Date
2010-12
Journal name
Economics Bulletin
Volume
30
Number
4
Publisher
Vanderbilt University
Pages
3177-3187
Metadata
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Author(s)
Arestoff, Florence
Hurlin, Christophe
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 / Keywords
Developing Countries; Capital Stocks; Public Capital
JEL
E62 - Fiscal Policy
E22 - Investment; Capital; Intangible Capital; Capacity
C82 - Methodology for Collecting, Estimating, and Organizing Macroeconomic Data; Data Access