Contribution to productivity or pork barrel? The two faces of infrastructure investment |
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Institution: | 1. BI Norwegian Business School, Norway;2. University of Oslo, Norway;3. Institute of Transport Economics, Oslo, Norway;1. Dept. of Geography and Environment, London School of Economics and Political Science, Houghton Street, London WC2A 2AE, United Kingdom;2. Department of Economics, Uppsala University, Box 513, SE-751 20 Uppsala, Sweden |
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Abstract: | This paper proposes a simultaneous-equation approach to the estimation of the contribution of transport infrastructure accumulation to regional growth. We model explicitly the political-economy process driving infrastructure investments; in doing so, we eliminate a potential source of bias in production–function estimates and generate testable hypotheses on the forces that shape infrastructure policy. Our empirical findings on a panel of France's regions over 1985–92 suggest that electoral concerns and influence activities were, indeed, significant determinants of the cross-regional allocation of transportation infrastructure investments. By contrast, we find little evidence of concern for the maximization of economic returns to infrastructure spending, even after controlling for pork-barrel. |
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