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Christophe Hurlin and Florence Arestoff
''Are Public Investment Efficient in Creating Capital Stocks in Developing Countries?''
( 2010, Vol. 30 No.4 )
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.
Keywords: Public Capital | Capital Stocks | Developing Countries
JEL: C8 - Data Collection and Data Estimation Methodology; Computer Programs: General
E2 - Macroeconomics: Consumption, Saving, Production, Employment, and Investment: General (includes Measurement and Data)
Manuscript Received : Dec 07 2009 Manuscript Accepted : Dec 02 2010

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