The Forgotten Rationale For Policy Reform: The Productivity Of Investment Projects
Using economic rates of return from World Bank-funded investments, we investigate how country characteristics and policies that influence aggregate performance affect investment productivity. Controlling for other characteristics, countries with undistorted (distorted) macroeconomic, exchange rate, trade, and pricing policies have highly productive (unproductive) investments. No type of project-in tradable or nontradable sectors-can be ''insulated'' from poor policies, where returns on investments are about ten percentage points lower. Productivity increases when policies improve within a country. Projects are also affected, nonlinearly, by the size of the public investment program where policies are undistorted. The results offer new evidence on benefits from policy reform and challenge conventional cost-benefit analysis. © 2000 the President and Fellows of Harvard College and the Massachusetts Institute of Technology
Year of publication: |
1999
|
---|---|
Authors: | Isham, Jonathan ; Kaufmann, Daniel |
Published in: |
The Quarterly Journal of Economics. - MIT Press. - Vol. 114.1999, 1, p. 149-184
|
Publisher: |
MIT Press |
Saved in:
Online Resource
Saved in favorites
Similar items by person
-
Civil Liberties, Democracy, and the Performance of Government Projects.
Isham, Jonathan, (1997)
-
The forgotten rationale for policy reform : the productivity of investment projects
Isham, Jonathan, (1995)
-
Governance and returns on investment : an empirical investigation
Isham, Jonathan, (1995)
- More ...