Infrastructure investment and economic growth, relevance of institutional factors

Authors

  • Manfred Esquivel Monge Banco Central de Costa Rica (BCCR), Costa Rica
  • Kerry Loaiza Marín Banco Central de Costa Rica (BCCR), Costa Rica

DOI:

https://doi.org/10.15359/eys.23-53.3

Keywords:

Infrastructure, growth, institutions, economic freedom, corruption

Abstract

We quantify the effect of infrastructure investment on economic growth and test whether that effect is conditioned by institutional factors. This is done by estimating dynamic panel data models with instrumental variables using GMM estimation. Results are in line with those reported by previous studies in terms of the magnitude of the effect of infrastructure on economic growth. Evidence suggests that bad institutions lessen the potential expansive effect of infrastructure investment. Latin American countries would be restraining the expansive potential of their infrastructure investment by showing unfavorable institutional performance. The same would be happening with mid and low-income countries.

Author Biographies

Manfred Esquivel Monge, Banco Central de Costa Rica (BCCR)

Máster en Economía, Essex University, Reino Unido. Investigador del Departamento de Investigación Económica del Banco Central de Costa Rica (BCCR), Costa Rica. 

Kerry Loaiza Marín, Banco Central de Costa Rica (BCCR)

Candidato a Doctor, Université Toulouse, Francia. Investigador del Departamento de Investigación Económica del Banco Central de Costa Rica (BCCR), Costa Rica

References

Arce, G., Céspedes, V. H., y Jiménez, R. (2006). La pobreza en Costa Rica 1987-2004. En V.H. Céspedes y R. Jiménez. Pobreza en Costa Rica. San José: Academia de Centroamérica. Recuperado de http://enlaceacademico.ucr.ac.cr/sites/default/files/publicaciones/Librojornada3.pdf

Arellano, M. y Bond, S. (1991). Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations. Review of Economic Studies 58(2), 277-297. doi: http://dx.doi.org/10.2307/2297968

Arellano, M. y Bover, O. (1995). Another look at the Instrumental Variable Estimation of Error-Component Models. Journal of Econometrics 68(1), 29-51. doi: http://dx.doi.org/10.1016/0304-4076(94)01642-d

Aschauer, D. (1989). Is Public Expenditure Productive? Journal of Monetary Economics. 23(2), 177-200. doi: http://dx.doi.org/10.1016/0304-3932(89)90047-0

Auerbach, A. y Gorodnichencko, Y. (2011). Fiscal Multipliers in Recession and Expansion. NBER Working Paper 17447. doi: http://dx.doi.org/10.3386/w17447

Auerbach, A. y Gorodnichencko, Y. (2012). Measuring the Output Responses to Fiscal Policy. American Economic Journal: Economic Policy 4 (2), 1-27. doi: http://dx.doi.org/10.1257/pol.4.2.1

Blundell, R. y Bond, R. (1998). Initial Conditions and Moment Restrictions in Dynamic Panel Data Models. Journal of Econometrics 87(1), 115-143. doi: http://dx.doi.org/10.1016/s0304-4076(98)00009-8

Calderón, C. y Servén, L. (2002). The Output Cost of Latin America’s Infrastructure GAP. Working Paper N° 186. Recuperado de http://www.bcentral.cl/web/guest/-/the-output-cost-of-latin-america-s-infrastructure-g-2

Calderón, C. y Servén, L. (2004). The effects of infrastructure development on growth and income distribution. Policy Research Working Papers. doi: http://dx.doi.org/10.1596/1813-9450-3400

Calderón, C., Easterly, W. y Servén, L. (2003). Infrastructure Compression and Public Sector Solvency in Latin America. En W. Easterly, y L., Servén (eds.). The Limits of Stabilization: Infrastructure, Public Deficits and Growth in Latin America, 95-118. doi: http://dx.doi.org/10.1596/978-0-8213-5489-6

Canning, D. (1999). Infrastructure´s contribution to aggregate output. World Bank Policy Research Discussion Paper 2246. doi: http://dx.doi.org/10.1596/1813-9450-2246

Castro, R. y Porras, J. A. (2009). Infraestructura y desarrollo económico en Costa Rica. En L. Mesalles, L. y O. Céspedes (eds.). Costa Rica 2008: Obstáculos al crecimiento económico. Recuperado de https://www.academiaca.or.cr/wp-content/uploads/2017/05/Libroanual_conportda_09.pdf

Celis, R. (2007). Costa Rica: Identificación de la combinación de inversiones públicas más apropiada durante el periodo de transición hacia la entrada en vigencia del CAFTA. Costa Rica. Proyecto de cooperación técnica CEPAL/BID/IFPRI. Recuperado de https://www.cepal.org/publicaciones/xml/6/32316/costa_rica_1.pdf

Ferreira, F. (1995). Roads to Equality: Wealth Distribution Dynamics with Public-Private Capital Complementarity. LSE Discussion Paper TE/95/286. http://eprints.lse.ac.uk/19368/1/Roads_to_Equality_Wealth_Distribution_Dynamics_with_Public-Private_Capital_Complementarity.pdf

Fondo Monetario Internacional. (2014). World Economic Outlook, October 2014: Legacies, Clouds and Uncertainties. doi: http://dx.doi.org/10.5089/9781484372265.081

Hansen, L. P. (1982). Large Sample Properties of Generalized Method of Moments Estimators. Econométrica 50 (4), 1029-1054. doi: http://dx.doi.org/10.2307/1912775

Klenow, P. y Rodríguez, A. (1997). The Neoclassical Revival in Growth Economics: Has It Gone Too Far? NBER Macroeconomics Annual 1997, 12, 73-103. doi: http://dx.doi.org/10.2307/3585220

Mankiw, N. G., Romer, D. y Weil, D. N. (1992). A contribution to the empirics of economic growth. Quaterly Journal of Economics 107 (2), 407-437. doi: http://dx.doi.org/10.2307/2118477

Mesalles, L. (2010). El proceso de políticas en el sector infraestructura de Costa Rica: actores, arenas e intercambios. San José, Costa Rica: Mimeo.

Mesalles, L. y Celis, R. (2011). Más y mejor infraestructura de transporte para reducir la pobreza rural en Costa Rica. En Fundação Konrad Adenauer. Inversión en infraestructura pública y reducción de la pobreza en América Latina. Recuperado de http://www.kas.de/wf/doc/kas_29022-1522-4-30.pdf?111114153158

Sargan, J. D. (1958). The Estimation of Economic Relationships Using Instrumental Variables. Econométrica 26 (3), 393-415. doi: http://dx.doi.org/10.2307/1907619

Published

04/06/2018

How to Cite

Infrastructure investment and economic growth, relevance of institutional factors. (2018). Economía Y Sociedad, 23(53), 40-61. https://doi.org/10.15359/eys.23-53.3

Issue

Section

Articles (Arbitrated section)

How to Cite

Infrastructure investment and economic growth, relevance of institutional factors. (2018). Economía Y Sociedad, 23(53), 40-61. https://doi.org/10.15359/eys.23-53.3

Comentarios (ver términos de uso)

Similar Articles

1-10 of 113

You may also start an advanced similarity search for this article.

Most read articles by the same author(s)

1 2 3 4 5 6 7 8 9 10 > >>