Involving the Private Sector in Public Investment in Transport and Construction: A Question of Efficiency - the German Situation

1999 ◽  
2021 ◽  
pp. 095162982110615
Author(s):  
Vladimir Shchukin ◽  
Cemal Eren Arbatli

Offering employment in the public sector in exchange for electoral support (patronage politics) and vote-buying are clientelistic practices frequently used by political machines. In the literature, these practices are typically studied in isolation. In this paper, we study how the interaction between these two practices (as opposed to having just one tool) affects economic development. We present a theoretical model of political competition, where, before the election, the incumbent chooses the level of state investment that can improve productivity in the private sector. This decision affects the income levels of employees in the private sector, and, thereby, the costs and effectiveness of vote-buying and patronage. We show that when the politician can use both clientelistic instruments simultaneously, his opportunity cost for clientelism in terms of foregone future taxes declines. As a result, the equilibrium amount of public investment is typically lower when both tools are available than otherwise.


Subject EU economic sovereignty. Significance COVID-19 is increasing momentum within the EU to enhance the bloc’s economic and strategic sovereignty by substantially reducing dependence on non-EU powers, particularly China. While the immediate concern is to become more self-sufficient in medical and pharmaceutical production, leaders are also set on strengthening European sovereignty in critical sectors including technology and automobiles. Impacts A strong economic recovery will be important in determining an EU consensus view concerning the bloc’s main economic competitors. Public investment in the private sector will provide greater economic stability, but more state influence on supply chains and investments. Scepticism of China will become a growing feature in European politics.


Author(s):  
Radek Jurčík

Public cooperation is aimed at ensuring the functioning of public administration. Some forms of cooperation are subject to a regulatory regime for European procurement directives, some forms of cooperation within the public and private sector is not subject to this regime. In this article we analyze the types of cooperation with regard to their character. The aim will be to identify the types of cooperation, their frequency, the need to use the legal regime of public investment, and other distinctive features affecting the modes of cooperation within the public administration and the implementation of public policies.


1991 ◽  
Vol 30 (4II) ◽  
pp. 721-729
Author(s):  
Khwaja Sarmad

In developing countries the rapid growth of the public sector during the past few decades was viewed as an important means for accelerating the pace of economic growth. In most developing countries the public sector now accounts for a prominent share of total production and investment. But the contribution of the public sector to growth has been much below expectations. In many cases public enterprises require large subsidies from the government and impose a significant fiscal burden on the economy, which leads to the notion that the private sector is much more productive than the public sector. However, little empirical work has been done in this field so that the proposals that emphasize the private sector vis-a-vis the public sector rest largely on theoretical considerations. Recent work by Khan and Reinhart (1990) is an important exception. Using cross-section data for the seventies of 24 developing countries they show that the arguments favouring the private sector in adjustment programmes have empirical support. Khan and Reinhart estimate a growth model in which the effect of private and public investment on growth is separated. A comparison of the marginal productivities of the two types of investment allows them to conclude that "all in all, there does seem to be some merit in the key role assigned to private investment in the development process by supporters of market -based strategies". [Khan and Reinhart (1990), p. 25.]


Author(s):  
Jeremy Breaden ◽  
Roger Goodman

Private higher education is an increasingly significant, ramified, and yet still conspicuously understudied topic. This chapter sets out various established and emerging models of private higher education, explaining key variables such as the relationship with state authority, diversity of institutional structures and modes of governance, and the interplay of social and commercial missions. It then asks where the Japanese system fits within these models and suggests a number of features which Japan shares with other countries. One of these features is the reliance of the state on the demand-absorbing role of private institutions—not one which is peripheral to the public system but rather the dominant mode of higher education provision and especially important in periods of rapid growth in participation rates. The chapter proceeds to develop a more Japan-specific profile of the private sector, establishing the definitional scope of private higher education in Japan and placing the numerical dominance of the private sector in direct contrast with its absolute disadvantage in terms of public investment. It also explains that, despite this handicap, private institutions do enjoy certain privileges in terms of governance structures, taxation, and scope of operations, and also boast distinctive educational strengths. To provide a context for understanding these features, the chapter also provides an in-depth history of the Japanese private university. This is offered as a conscious alternative to more orthodox historical accounts which tend to place national universities in the limelight and treat their private counterparts as a cast of supporting characters.


2019 ◽  
Vol 19 (263) ◽  
Author(s):  

Zambia’s development strategy has targeted a rapid scale-up of public investment to address infrastructure needs. This has resulted in large fiscal deficits, financed by nonconcessional debt and the accumulation of domestic arrears, adversely impacting the private sector. Recent efforts to adjust the fiscal stance have delivered some improvement in revenues, but deficits have continued to rise following faster-than-budgeted execution of foreign-financed capital spending. With the anticipated growth dividend yet to materialize, the debt burden has risen sharply, resulting in currency weakness and rising local borrowing costs that have further pushed up the interest bill. Reserve coverage has fallen to 1.7 months of imports.


2016 ◽  
Vol 12 (16) ◽  
pp. 390
Author(s):  
Sarah Chebet ◽  
Peter W Muriu

This study investigates the effects of selected macroeconomic variables on the Demand for credit by the private sector in Kenya. The study used annual time series data for the period 1980-2012. Data was obtained from Kenya National Bureau of Statistics, World Development Indicators and supplemented by Central Bank of Kenya. Using Vector Error Correction Model (VECM) methodology, the study established that; Public investment, Short term interest rate, Long term interest rate, Employment and Domestic debt have a positive effect on demand for credit by the private sector, while per capita GDP and Exchange rate have a negative effect. The policy implication of these results is that providing sound economic growth policies, a stable macroeconomic situation, policies leading to lower credit cost and greater financial liberalization would simultaneously boost lending and lower the risk of lending to the private sector.


2016 ◽  
Vol 17 (2) ◽  
pp. 1 ◽  
Author(s):  
Keith O. Fuglie

<p><strong>English<br /></strong>Investment in agricultural research is a key to agricultural productivity growth. In Indonesia, public investment in agricultural research has expanded significantly in the past two decades, although many agricultural research institutions remain underfunded. The private sector contributes substantially to the financing of public research on plantation crops and forestry. The past decade has also seen a doubling in real terms of agricultural research investment by private companies, although this private investment remains small compared with other developing countries in Asia. Multinational seed, chemical, and animal companies are playing a growing role in transferring new technology to Indonesia. Recent policy shifts have increased private-sector incentives to invest in agricultural research and technology transfer.</p><p> </p><p><strong>Indonesian<br /></strong>Investasi dalam riset pertanian adalah kunci bagi peningkatan produktivitas pertanian. Di Indonesia, investasi pemerintah dalam riset pertanian telah berkembang pesat dalam dua dekade terakhir, sekalipun banyak lembaga riset pertanian tetap mengalami kekurangan dana. Sektor swasta memberikan sumbangan yang sangat besar terhadap pembiayaan riset pemerintah dalam bidang tanaman perkebunan dan kehutanan. Dalam dekade terakhir juga telah terjadi perlipatan dua di dalam nilai riil dari investasi dalam riset pertanian yang dilakukan oleh perusahaan-perusahaan swasta, walaupun investasi swasta ini tetap kecil dibandingkan dengan negara-negara berkembang lainnya di Asia. Perusahaan-perusahaan bibit, bahan kimia, dan ternak multunasional memainkan peranan yang semakin besar di dalam transfer teknologi baru ke Indonesia. Perubahan-perubahan kebijakan yang terjadi baru-baru ini telah meningkatkan dorongan bagi sektor swasta untuk melakukan investasi dalam riset pertanian dan transfer teknologi.</p>


2021 ◽  
Vol 70 (2) ◽  
pp. 155-161
Author(s):  
Thilo Schaefer

Abstract European governments face a two-fold challenge: they need to mitigate the negative consequences of the Corona pandemic and meet the increased climate protection requirements imposed on them by the tightening of targets through the European Green Deal. This raises the question to which extent political measures can serve both economic recovery and climate protection. By prioritising urgent public investment to address infrastructure deficits and smart policy instruments to incentivise climate-friendly action the German government enables the private sector to recover and develop sustainable business models.


2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Opeoluwa Adeniyi Adeosun ◽  
Monica Adele Orisadare ◽  
Fisayo Fagbemi ◽  
Sikiru Adetona Adedokun

PurposeThis study explores the asymmetric linkage between public investment and private sector performance in Nigeria. This is due to the presence of nonlinear structures in the behavior of domestic investment series with evidences of structural time breaks, which fall within periods of global financial crises and oil shocks.Design/methodology/approachMain data on gross capital formation, gross fixed capital formation, domestic credit to private sector, domestic credit to private sector by banks are used for the study span through 1986 to 2017. Evidence of asymmetry spurs the study to adopt the nonlinear autoregressive distributed lag, asymmetric generalized impulse response and variance decomposition and asymmetric granger causality techniques.FindingsIt is shown that positive (negative) investment shocks exhibit a non-negligible and substantial stimulating (dampening) influence on the long-run performance of private sector in the economy. However, there is evidence that negative investment shocks portend a positive influence on the performance of private sector in the short run. This suggests that negative shocks to investment may not dampen the effectiveness of private sector in the short run, and this thus brings to bear the debate on the tenability of public investment as a potent counter cyclical tool in enhancing short-run private sector growth. The nonlinear granger causality also shows a unidirectional nonlinear causality from public investment to private sector performance. However, there is no evidence of bidirectional nonlinear causality.Originality/valueThis study provides quantitative evidence that Nigeria still depends exclusively on public investment, and as an oil-based rentier economy its economic diversification drive still remains bleak.


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