Peer Reviewed Open Access

This paper is reviewed in accordance with the Peer Review Program of IRA Academico Research

Public Capita and Growth: The Role of Institutions in Development

Fred EKA
DOI: http://dx.doi.org/10.21013/jmss.v17.n4.p3
Abstract
This study analyzes the links between public capital and growth using an econometric model of simultaneous equations, estimated on a panel of forty-three developing countries over the period 2003-2020. This growth model explains the determinants of GDP and public and private capital stocks. The accumulation of public, private and human capital generates externalities that are sources of endogenous growth. However, the formation of public capital generated a crowding out effect, to the detriment of that of private capital, because of differentiated budgetary constraints. Our results show that several developing countries have moved away from an optimal structure for the growth of sharing of available capital between the public and private sectors. In doing so, are institutions a prerequisite for the economic development of African countries.
Keywords
Public capital, private capital, growth, crowding out effect
Full Text:
PDF
References

Amartya Sen (1999), Commodities and capabilities, Oxford University Press.

Arrow KJ and Kurz (1970). Public Investment the Rate of Return, and Optimal Fiscal Policy, Baltimore, The Johns Hopkins Press.

Aschauer (1989). Is Public Expenditure Productive? Journal of Monetary Economics, 23, 177-200, May.

Barro RJ (1990). Government Spending in Simple Model of Endogenous Growth, Journal of Political Economy, 98 (5), part II, S103-S125, October.

Barro RJ and Sala-I-Martin (1995). Economic Growth, New York McGraw-Hill.

Benhabib and Spiegel MM (1994). The Role of Human Capital in Economic Development Evidence for Aggregate Cross-Country Data, Journal of Monetary Economics, 34, p.143-173.

Berth Lemy J.-C. Dessus and Varoudakis (1997). Human capital and growth: the role of the trade regime, Revue économique, 48 (3), May, p.419-428.

Berth Lemy J.-C. Herrera and Sen (1995). Military Expenditure and Economic Growth: An Endogenous Growth Perspective. Economics of Planning, 28 (2-3), p. 205-233.

Dessus S. and Herrera R. (1999). Public capital and growth: a study in panel econometrics. Economic review, volume 50, n 1, pp. 113-126.

Eaton J. Gergovitz and Stiglitz (1986). The Pure Theory of Country Risk. European Economic Review, 30, p. 481-513.

Gramlich EM (1994). Infrastructure Investment Review Essay, Journal of Economic Literature, 32, p. September 1176-1196.

Nehru and Dhareshwar (1993). New Database on Physical Capital Stock Sources Methodology and Results. Revistas de Analisas Economico, 8 (l), June, p. 37-59.

Nehru and Dhareshwar (1994). New Estimates of Total Factor Productivity Growth for Developing and Industrial Countries. Policy Research Working Paper, No. 1313, International Economic Department, The World Bank, Washington, DC.

Rostow (1960). The stages of economic growth. Translated from the American by M.-J Du Rouret. Economic review, Year 1965, 16-4, pp. 629-630.

Sala-I-Martin (1994). Measures of Aggregate Value of Human Capital. Seminar Paper. International Monetary Fund, Research Department, August.


©IRA Academico Research & its authors
This article is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License. This article can be used for non-commercial purposes. Mentioning of the publication source is mandatory while referring this article in any future works.