PRODUKTYWNOŚĆ PUBLICZNYCH INWESTYCJI INFRASTRUKTURALNYCH
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Date
2005
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Wydział Prawa i Administracji UAM
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PRODUCTIVITY OF THE PUBLIC INFRASTRUCTURAL INVESTMENTS
Abstract
The results of the empirical research into the effects of public infrastructural investments on
the growth of productivity that can be found in literature are not uniform. The first works initiated
by Aschauer in 1989 were based on the Cobb-Douglas production function and indicated a certain
elasticity of the product with respect to public fund investment ranging between 0.30-0.50. This
approach, however, was criticised, both for its reasoning logic and for the econometric method it
had used. The main criticisms included the following:
- Firstly, the estimates of the public capital may be incorrect and the term ‘infrastructure’ is
a vague one with no agreed definition.
- Secondly, the conversion of the production function into the cost function, as well as an attempt
to estimate that function for regions within a country implies a much lower return from
the public capital.
- Thirdly, there are a number of econometric issues, such as eg. the direction of causation and
the occurrence of a spurious regression.
- Fourthly, the long-term supply effects of infrastructural investments may be exactly opposite
to the short-term demand effects.
- Fifthly, the way in which infrastructure is managed and priced may be as important as the
provision of infrastructure.
The conclusion is that the public infrastructure, although very important for the development,
may only be regarded as one of many production factors and only in combination with other
factors, such as the human capital or knowledge can they lead to a substantial growth in
productivity.
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Ruch Prawniczy, Ekonomiczny i Socjologiczny 67, 2005, z. 2, s. 155-171.
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0035-9629