Public and Private Investment and The Growth Process in Developing Countries

Abstract

This paper examines the relative contribution of public and private investment to per capita GDP growth in developing countries. It extends the basic neoclassical model of growth by separating investment into its public and private components, and estimates this model for a sample of 95 developing countries over the period 1970–90 using both cross‐sectional and panel data. Using data on relative supplies of public and private capital stock, rates of return to public and private investment are also computed. The results suggest that once other determinants of growth, such as human capital formation, population growth, and technical progress, are taken into account, public and private investment have different effects on growth, and that these effects are characterized by marked regional and inter‐temporal variations.

Concentration and Competition of Container Ports in Turkey: A Statistical Analysis

“…The results show that prior to 2000, the three biggest container ports in terms of throughputs were owned by the public, however post 2005, the dominancy passed into the private ports which implies lowered crowding out effect for the private investments, consistent with Khan and Kumar (1997).…”

“…Analyses of the relative effects of public and private investments have implications both for policy and theoretical views (Khan and Kumar, 1997).…”

Private and Public Investment in Africa: A Time-Series Cross-Country Analysis

“…Using the case of developed economy in 1980s, (Aschauer, 1989) shows that the decreasing in public infrastructure expenditures confirms that the part of the productivity does not increase. A large part of literature and researches that analyzed whether public capital leads to participate in increasing output growth and/or the productivity of private investment have followed these studies: (Munnell, 1990;Khan & Reinhart, 1990;Barro, 1990;Easterly & Rebelo, 1993;Tatom, 1991Tatom, , 1993Evans & Karras, 1994a, 1994bRamirez, 1998;Khan & Kumar, 1997).…”

A Fiscal Price Tag for International Reserves

“…16 Many studies do not find a significant elasticity at all. However, Khan and Kumar (1997) find a significant elasticity of about 0.3 for 1970-90, and Clements and others (2003) find an elasticity of about 0.2 for 1970-99, each of them examining the average elasticity of per capita GDP growth to public investment for a large number of developing countries. Based on these estimates, here, the upper bound of the forgone social return on public investment assumes an elasticity of 0.3, and the lower bound an elasticity of 0.2.…”