The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Public Sector Investment Efficiency in Developing Countries

Reference work entry
DOI: https://doi.org/10.1057/978-1-349-95189-5_3064

Abstract

There are numerous examples where public investment has been grossly mismanaged and where corruption has overwhelmed the entire process (unfinished roads, highways leading to nowhere, incomplete or unusable bridges and power generation projects). This entry aims at reviewing the existing literature on the potential impact of such public investment inefficiencies on productivity and output, in theoretical models and empirical exercises. We conclude that despite recent progress in assessing and incorporating such inefficiencies in economic analysis, the composition of public capital and its interlinkages with other factors of production and with structural economic conditions should remain a key area of future research.

Keywords

Public Investment Marginal Product of Capital Capital Stock Government Inefficiencies 
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Notes

Acknowledgments

Papageorgiou acknowledges financial support from the U.K.’s Department for International Development (DFID).

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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  1. 1.International Monetary FundWashingtonUSA

Section editors and affiliations

  • Jonathan Temple

There are no affiliations available