| Article ID: | iaor19982060 |
| Country: | United States |
| Volume: | 9 |
| Issue: | 3 |
| Start Page Number: | 440 |
| End Page Number: | 466 |
| Publication Date: | Jan 1997 |
| Journal: | Journal of Public Budgeting, Accounting and Financial Management |
| Authors: | Khan Mohsin S., Kumar Manmohan S. |
| Keywords: | investment, economics, government, statistics: empirical, statistics: regression, developing countries |
This paper estimates a neoclassical model of growth in which investment is separated into its public and private components. Estimates are also obtained for the effects of public and private investment on total factor productivity. The paper then examines whether the speed of convergence in real per capita incomes across developing countries is influenced by the shares of the two types of investment. The results show that both public and private investment have different effects on economic growth and productivity – a relatively high share of public investment is associated with a decrease in the speed of convergence.