This paper develops a multi-sector, small open economy Dynamic Stochastic General Equilibrium model, which includes the accumulation of human capital, built via public expenditures in education and health. Four possible fiscal rules are examined for total public investment in infrastructure,...

This paper offers an assessment of the methodologies employed to estimate the economic opportunity cost of capital for public sector projects, relying on the Mexican case for an applied empirical exercise. The traditional weighted cost of capital (top-down) approach used in the estimation of...

This paper estimates the effect of government investment on private investment in a sample of 39 low-income countries. Fluctuations in a predetermined component of disbursements on loans from official creditors to developing country governments are used as an instrument for fluctuations in...

Sovereign wealth funds represent a large and growing pool of savings. An increasing number of these funds are owned by natural resource?exporting countries and have a variety of objectives, including intergenerational equity and macroeconomic stabilization. Traditionally, these funds have...

While debt-financed productive public investment raises a country?s debt ratios in the short run, it can also generate higher growth, revenues, and exports, leading over time to lower debt ratios. This paper develops a framework to assess whether countries meet the conditions for realizing the...

Evidence from a large panel of low-income and lower middle-income countries over the period 1995-2012 suggests that, contrary to other countries, public investment in the West African Economic and Monetary Union (WAEMU) has been pro-cyclical. Public investment contracts more in "bad times" than...

The Republic of Congo, an oil rich country in Central Africa, has made substantial progress in the past decade in stabilizing the economy and achieving high growth rates. However, despite reaching middle-income country status in 2006, the economy is not diversified, poverty remains pervasive,...

This paper investigates the impact of institutional quality on public investment levels over the period 1984-2008. Moreover, it studies how the volatility of public investment and the quality of infrastructure are affected by institutional quality, and explores the contribution of other critical...

Why do politicians distort public investments? And given that public investments are poor because presumably that is what is politically rational, what types of reforms are likely to be both efficiency improving and compatible with the interests of politicians? This paper explores these two...

The authors propose a bottom up approach to link public investment programs with a class of macro models recently developed to quantify Strategy Papers for Human Development (SPAHD) in low-income countries. The methodology involves establishing constant-price projections of investment outlays...