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Investing in Public Investment

Author: Mr.Chris Papageorgiou

Publisher: International Monetary Fund

Published: 2011-02-01

Total Pages: 46

ISBN-13: 1455217891

This paper introduces a new index that captures the institutional environment underpinning public investment management across four different stages: project appraisal, selection, implementation, and evaluation. Covering 71 countries, including 40 low-income countries, the index allows for benchmarking across regions and country groups and for nuanced policy-relevant analysis and identification of specific areas where reform efforts could be prioritized. Potential research venues are outlined.

Some Misconceptions about Public Investment Efficiency and Growth

Author: Mr.Andrew Berg

Publisher: International Monetary Fund

Published: 2015-12-23

Total Pages: 37

ISBN-13: 1513589970

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We reconsider the macroeconomic implications of public investment efficiency, defined as the ratio between the actual increment to public capital and the amount spent. We show that, in a simple and standard model, increases in public investment spending in inefficient countries do not have a lower impact on growth than in efficient countries, a result confirmed in a simple cross-country regression. This apparently counter-intuitive result, which contrasts with Pritchett (2000) and recent policy analyses, follows directly from the standard assumption that the marginal product of public capital declines with the capital/output ratio. The implication is that efficiency and scarcity of public capital are likely to be inversely related across countries. It follows that both efficiency and the rate of return need to be considered together in assessing the impact of increases in investment, and blanket recommendations against increased public investment spending in inefficient countries need to be reconsidered. Changes in efficiency, in contrast, have direct and potentially powerful impacts on growth: “investing in investing” through structural reforms that increase efficiency, for example, can have very high rates of return.

The Power of Public Investment Management

Author: Kai Kaiser

Publisher: World Bank Publications

Published: 2014-10-17

Total Pages: 203

ISBN-13: 1464803161

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Public resources--if invested well in public infrastructure and services--can catalyze private and community e orts and unleash an inclusive growth and development process. But too often public projects are selectedto support political patronage, poorly designed, underfunded, long delayed, very costly, or badly implemented, with little bene t to the population. This is a critical challenge for many countries, both rich and poor. This book identi es eight key institutional features that countries need to adopt to ensure that public investments support growth and development. The Power of Public Investment Management provides a clear, nontechnical discussion on approaches to improving project appraisal, disciplining political intervention in project selection, dealing with uncertainty (an issue that is likely to grow in importance with the e ects of climate change), integrating procurement skills into project design and implementation, and managing the decision on public-private partnerships. Byproviding a simple but comprehensive framework and global experience, the book provides policy makers the guidance to adopt good functional principles in the design of institutions to strengthen public investment management.

Public Investment and Fiscal Policy - Lessons From the Pilot Country Studies

Author: International Monetary Fund. Fiscal Affairs Dept.

Publisher: International Monetary Fund

Published: 2005-01-04

Total Pages: 49

ISBN-13: 1498331637

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This paper reports on findings from eight pilot country studies on public investment that were carried out during the second half of 2004. The pilot country studies covered a diverse group of countries. Specifically, they included countries in Latin America (Brazil, Chile, Colombia, and Peru), Africa (Ethiopia and Ghana), the Middle East (Jordan), and Asia (India).

Public Investment as an Engine of Growth

Author: Mr.Andrew M. Warner

Publisher: International Monetary Fund

Published: 2014-08-11

Total Pages: 76

ISBN-13: 1498378277

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This paper looks at the empirical record whether big infrastructure and public capital drives have succeeded in accelerating economic growth in low-income countries. It looks at big long-lasting drives in public capital spending, as these were arguably clear and exogenous policy decisions. On average the evidence shows only a weak positive association between investment spending and growth and only in the same year, as lagged impacts are not significant. Furthermore, there is little evidence of long term positive impacts. Some individual countries may be exceptions to this general result, as for example Ethiopia in recent years, as high public investment has coincided with high GDP growth, but it is probably too early to draw definitive conclusions. The fact that the positive association is largely instantaneous argues for the importance of either reverse causality, as capital spending tends to be cut in slumps and increased in booms, or Keynesian demand effects, as spending boosts output in the short run. It argues against the importance of long term productivity effects, as these are triggered by the completed investments (which take several years) and not by the mere spending on the investments. In fact a slump in growth rather than a boom has followed many public capital drives of the past. Case studies indicate that public investment drives tend eventually to be financed by borrowing and have been plagued by poor analytics at the time investment projects were chosen, incentive problems and interest-group-infested investment choices. These observations suggest that the current public investment drives will be more likely to succeed if governments do not behave as in the past, and instead take analytical issues seriously and safeguard their decision process against interests that distort public investment decisions.

Public Investment Management Assessment - Review and Update

Author: International Monetary Fund. Fiscal Affairs Dept.

Publisher: International Monetary Fund

Published: 2018-05-10

Total Pages: 32

ISBN-13: 1498308449

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"Public Investment Management Assessments (PIMAs) are the IMF‘s key tool for assessing infrastructure governance over the full investment cycle and supporting economic institution building in this area. The PIMA framework was first introduced in the 2015 Board Paper on “Making Public Investment More Efficient,” as part of the IMF’s Infrastructure Policy Support Initiative (IPSI). A key motivation for its development has been that strong infrastructure governance is critical for public investment to spur economic growth. PIMAs offer rigorous assessment of infrastructure governance, that is, the key public investment management (PIM) institutions and processes of a country. On the basis of the PIMAs conducted to date, this paper summarizes the lessons learned and updates the assessment framework itself. PIMAs summarize the strengths and weaknesses of country public investment processes, and set out a prioritized and sequenced reform action plan. The PIMA framework has been well-received by member countries, with over 30 PIMAs conducted to date (mainly in emerging markets (EMs) and low income developing countries (LIDCs), and a pipeline of new requests in place; eight PIMAs have been or are about to be published. The PIMAs conducted show that there is much room for strengthening PIM, with weaknesses spread across the investment cycle. The results and recommendations of several PIMAs have been used in IMF lending, surveillance, and capacity development (CD) work, and have improved support and coordination among CD providers. While leaving the structure of the 2015 framework unchanged, the revised PIMA framework highlights some critical governance aspects more prominently. In particular, it brings out more fully some key aspects of maintenance, procurement, independent review of projects, and the enabling environment (e.g., adequacy of the legal framework, information systems, and staff capacity). Yet, the revised PIMA retains the key features of the 2015 framework, including the three-phase structure (planning, allocation, and implementation) with five institutions assigned to each phase, three dimensions under each institution, and three possible scores under each dimension (i.e., not/partially/fully met). The revision has benefitted from extensive stakeholder feedback, including from IMF teams, World Bank staff, and country authorities."

Public Investment Criteria

Author: Stephen A. Marglin

Publisher:

Published: 1967

Total Pages: 104

ISBN-13:

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Essay on public investment criteria and the role of cost benefit analysis in the implementation of economic planning for economic development in India - criteria include consumption benefits, costs, time factor, interest, budgetary constraints, risk and dynamics. References pp. 100 and 101.

A European Public Investment Outlook

Author: Floriana Cerniglia

Publisher: Open Book Publishers

Published: 2020-06-12

Total Pages: 166

ISBN-13: 1800640145

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This outlook provides a focused assessment of the state of public capital in the major European countries and identifies areas where public investment could contribute more to stable and sustainable growth. A European Public Investment Outlook brings together contributions from a range of international authors from diverse intellectual and professional backgrounds, providing a valuable resource for the policy-making community in Europe to feed their discussion on public investment. The volume both offers sector-specific advice and highlights larger areas which should be prioritized in the policy debate (from transport to social capital, R&D and the environment). The Outlook is structured into two parts: the chapters of Part I respectively explore public investment trends in France, Germany, Italy, Spain and Europe as a whole, and illuminate how the legacy of the 2008 Global Financial Crisis is one of insufficient public investment. Part II investigates some areas into which resources could be channelled to reverse the recent trend and provide European economies with an adequate public capital stock. The essays in this outlook collectively foster a broad approach to and definition of public investment, that is today more relevant than ever. Offering up a timely and clear case for the elimination of bias against investment in European fiscal rules, this outlook is a welcome contribution to the European debate, aimed both at policy makers and general readers.

Public Investment in Resource-Abundant Developing Countries

Author: Mr.Andrew Berg

Publisher: International Monetary Fund

Published: 2012-11-15

Total Pages: 48

ISBN-13: 1475535562

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Natural resource revenues provide a valuable source to finance public investment in developing countries, which frequently face borrowing constraints and tax revenue mobilization problems. This paper develops a dynamic stochastic small open economy model to analyze the macroeconomic effects of investing natural resource revenues, making explicit the role of pervasive features in these countries including public investment inefficiency, absorptive capacity constraints, Dutch disease, and financing needs to sustain capital. Revenue exhaustibility raises medium-term issues of how to sustain capital built during a windfall, while revenue volatility raises short-term concerns about macroeconomic instability. Using the model, country applications show how combining public investment with a resource fund---a sustainable investing approach---can help address the macroeconomic problems associated with both exhaustibility and volatility. The applications also demonstrate how the model can be used to determine the appropriate magnitude of the investment scaling-up (accounting for the financing needs to sustain capital) and the adequate size of a stabilization fund (buffer).