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_aAtolia, Manoj _91 |
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_aInvesting in Public Infrastructure _bRoads or Schools? |
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_aWashington _bInternational Monetary Fund _c2017 |
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_aIMF Working Paper Series _nWP/17/105 _91 |
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520 | _aWhy do governments in developing economies invest in roads and not enough in schools? In the presence of distortionary taxation and debt aversion, the different pace at which roads and schools contribute to economic growth turns out to be central to this decision. Specifically, while costs are front-loaded for both types of investment, the growth benefits of schools accrue with a delay. To put things in perspective, with a “big push,” even assuming a large (15 percent) return differential in favor of schools, the government would still limit the fraction of the investment scale-up going to schools to about a half. Besides debt aversion, political myopia also turns out to be a crucial determinant of public investment composition. A “big push,” by accelerating growth outcomes, mitigates myopia—but at the expense of greater risks to fiscal and debt sustainability. Tied concessional financing and grants can potentially mitigate the adverse effects of both debt aversion and political myopia. | ||
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_aEducation _91 |
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_a Public investment _91 |
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_aDebt sustainability _91 |
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_aHuman capital _91 |
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_aPolitical myopia _91 |
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_aDebt aversion _91 |
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_aLow income developing countries _91 |
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_aDeveloping countries _91 |
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_aIMF _91 |
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_aLi, Bin Grace _91 |
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_aMarto, Ricardo _91 |
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_aMelina, Giovanni _91 |
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_aIMF _91 |
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_2udc _cEM |
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_c81433 _d81433 |
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_40 _eInternet _00 _bLIPS _10 _oElectronic media _d2017-11-28 _70 _cE _uftp://ftp.ips.lk/ebooks/IMF/InvestingPublicInfrastructure.pdf _yEM _aLIPS |