The Forgotten Rationale for Policy Reform: The Productivity of Investment Projects
Using economic rates of return from World Bank-funded investments, we investigate how country characteristics and policies that influence aggregate performance affect investment productivity. Controlling for other characteristics, countries with undistorted (distorted) macroeconomic, exchange rate,...
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| Veröffentlicht in: | The Quarterly journal of economics 1999-02, Vol.114 (1), p.149-184 |
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| creator | Isham, Jonathan Kaufmann, Daniel |
| description | Using economic rates of return from World Bank-funded investments, we investigate how country characteristics and policies that influence aggregate performance affect investment productivity. Controlling for other characteristics, countries with undistorted (distorted) macroeconomic, exchange rate, trade, and pricing policies have highly productive (unproductive) investments. No type of project—in tradable or nontradable sectors—can be “insulated” from poor policies, where returns on investments are about ten percentage points lower Productivity increases when policies improve within a country. Projects are also affected, nonlinearly, by the size of the public investment program where policies are undistorted. The results offer new evidence on benefits from policy reform and challenge conventional cost-benefit analysis. |
| doi_str_mv | 10.1162/003355399555972 |
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| ispartof | The Quarterly journal of economics, 1999-02, Vol.114 (1), p.149-184 |
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| source | Business Source Complete; Periodicals Index Online; JSTOR Archive Collection A-Z Listing; Oxford University Press Journals All Titles (1996-Current) |
| subjects | Black markets Cost benefit analysis Economic development Economic policy Economic reform Economic theory Financial investments Foreign exchange rates Foreign investments Gross domestic product Industrial productivity International aspects International economic relations Investment policy Investment return rates Investments Macroeconomics Manycountries Political aspects Price distortions Pricing policies Productivity Public investments Rates of return Studies World Bank |
| title | The Forgotten Rationale for Policy Reform: The Productivity of Investment Projects |
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