Private investment and economic growth in developing countries

Reinhart, Carmen and Khan, Mohsin (1989): Private investment and economic growth in developing countries. Published in: World Development , Vol. 18, No. 1 (January 1990): pp. 243-258.

Abstract

Despite the growing support for market-oriented strategies, and for a greater role of private investment, empirical growth models for developing countries typically make no distinction between the private and public components af investment. This paper sheds some light on this important issue by formulating a simple growth model that separates the effects of public sector and private sector investment. This model is estimated for a cross-section sample of 24 developing countries, and the results support the notion that private investment has a larger direct effect on growth than does public investment.

• Item Type: MPRA Paper
• Language: English
• Keywords: growth investment public private productivity
• Subjects: E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy; E - Macroeconomics and Monetary Economics > E1 - General Aggregative Models

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