Strategic interactions in the provision of public infrastructures: Evidence from Economic and Monetary Community of Central Africa (EMCCA) countries

Mimboe, Bernard (2021): Strategic interactions in the provision of public infrastructures: Evidence from Economic and Monetary Community of Central Africa (EMCCA) countries.

Abstract

Using a spatial autoregressive model, this paper highlights the issue of strategic interactions in the provision of public inputs, which is an important dimension of territorial competition within a developing economic integration area. The results of the estimations, carried out using the maximum likelihood method in panel data, show that the countries of the Economic and Monetary Community of Central Africa (EMCCA) are developing strategic behaviours in the supply of public inputs, particularly in the public infrastructure sector. Consequently, EMCCA countries need to be aware of the existence of this phenomenon in order to improve their public input supply strategies, and also to improve their positioning on the international market for the location of economic activities.

• Item Type: MPRA Paper
• Language: English
• Keywords: EMCCA, public infrastructure, strategic interactions, territorial competition
• Subjects: H - Public Economics > H4 - Publicly Provided Goods > H41 - Public Goods; H - Public Economics > H5 - National Government Expenditures and Related Policies > H54 - Infrastructures ; Other Public Investment and Capital Stock; H - Public Economics > H7 - State and Local Government ; Intergovernmental Relations > H77 - Intergovernmental Relations ; Federalism ; Secession

References

Agostini C., P. H. Brown et X. Zhang, 2011. Neighbor Effects in the Provision of Public Goods in a Young Democracy: Evidence from China, International Food Policy Research Institute, Discussion Paper. Anselin L., 1988. Spatial econometrics: Methods and models, Kluwer Academy Publishers, Dordrecht et al. (eds). Anselin L. (1995), Local indicators of spatial association – LISA, Geographical Analysis, vol. 27, no2. Aschauer D. A., 1989a. Is Public Expenditure Productive? Journal of Monetary Economics, No. 23, pp. 177-200. Aschauer D. A., 1989b. Does Public Capital Crowd Out Private Capital? Journal of Monetary Economics, No. 24, pp. 171-188. Aschauer D. A., 1989c. Public Investment and Productivity Growth in the Group of Seven Economic Perspectives, No. 13 (Vol. 5), pp. 17-25. Avom D., A. Bobo and D. Mignamissi, 2015. Renforcer l’efficacité de la convergence macroéconomique dans la CEMAC, Revue d’Economie du Développement, No 4, pp. 43-81. BAD, 2018. Perspectives économiques en Afrique. Benassy-Quere A., N. Golbalraja and A. Trannoy, 2007. Tax and public input competition, Economic Policy, 22. Besley T. and A. Case, 1995. Incumbent behavior: Vote seeking, tax setting and yardstick competition, American Economic Review, vol. 85. Birkelöf L. C., 2009. Spatial interaction and Local Government Expenditures for Functionally Impaired in Sweden, Economic Studies, No 798. Brueckner J. K., 2003. Strategic interaction among governments: An overview of empirical studies, International Regional Science Review, 26 (2), 175-188. Case A. C., H. S. Rosen and J. R. Hines, 1993. Budget spillovers and fiscal policy interdependence: Evidence from the states, Journal of Public Economies, 52, pp. 285-307. Cliff A. and J. Ord, 1973. Spatial auto corrélation, London, Pion. Costa H., L. G. Veiga et M. Portela, 2013. Interactions in local governments’ spending decisions: Evidence from Portugal, Regional Studies Association, (2013). Ega Mbakile-Moloi C., 2007. Copycat Theory: Testing for Fiscal Policies Harmonization in the Southern African Development Community (SADC) and Sub-Saharan Africa (SSA), Ph D. thesis, Andrew Young School of Policy Studies of Georgia State University. Ermini B. and Santolini R., 2010. Local expenditure interaction in Italian municipalities: do local partnerships make a difference? Local Government Studies 36(5). FMI, 2018. Perspectives économiques régionales pour l’Afrique subsaharienne : mobilisation des recettes fiscales et investissement privé, Washington, DC, Avril. Foucault M., Madies T. and S. Paty, 2008. Public spending interactions and local politics: Empirical evidence from French municipalities, Public Choice, 137. Fujita M. Krugman P. and A. J. Venables, 1999. The Spatial Economy: Cities, Regions and International Trade, MIT Press, Cambridge, MA. Gianpiero T., 2009. Public infrastructure: definition, classification and measurement issues, Munich Personal RePEc Archive No. 12990. https://mpra.ub.uni-muenchen.de/12990/ Gibbon S. and Overman H., 2012. Mostly pointless spatial econometrics?, Journal of Regional Science, 52(2), 172-191. Hamadou H., S. Paty and M. Savona, 2014. Strategic interactions in public R&D across European countries: A spatial econometric analysis, Research Policy, Vol. 43(7), p. 1217-1226. Hanes N., 2002. Spatial spillover effects in the Swedish local rescue services, Regional Studies 36, 531-539. Kelejian H. H. and D. P. Robinson, 1993. A suggested method of estimation for spatial interdependent models with auto correlated errors and an application to a county expenditure model, Papers in Regional Science, 72, pp. 297-312. Kelejian H. H. and I. R. Prucha, 1998. A generalized spatial two-stage least squares procedure for estimating a spatial autoregressive model with autoregressive disturbances, Journal of Real Estate Finance and Economies, 17, pp. 99-121. Kelejian H. H. and I. R. Prucha, 1999. A generalized moments estimator for the autoregressive parameters in a spatial model, International Economic Review 40, no 2. Kelejian H. H. and I. R. Prucha, 2006. Specification and estimation of spatial autoregressive models with autoregressive and heteroskedastic disturbances, In: EGA MBAKILE-MOLOI, C. (2007), Copycat Theory: Testing for Fiscal Policies Harmonization in the Southern African Development Community (SADC) and Sub-Saharan Africa (SSA), Ph D. thesis, Andrew Young School of Policy Studies of Georgia State University. Leprince M., Paty S. and Reulier E., 2005. Choix d’imposition et interactions spatiales entre collectivités locales : Un test sur les départements français, Recherches Economiques de Louvain, 71(1). Lyytikäinen T., 2012. Tax competition among local governments: Evidence from a property tax reform in Finland, Journal of Public Economics, 96, 584-595. Mc Garvey Mary G. and M. Beth Walker, 2004. GMM estimation of fiscal policy interdependence across States, Urban and Regional Analysis Group, no 04. Mimboé Noah B. and S. Fambon, 2019. Interactions fiscales stratégiques entre pays de la CEMAC et flux entrants d’investissements directs étrangers, Région et Développement, numéro 49 – octobre 2019. Oates W. E., 1972. Fiscal federalism. New York: Harcourt Brace Jovanovich. Salmon P., 1987. Decentralisation as an incentive scheme, Oxford Review of Economic Policy, 3(2), 24-43. Tiebout C. M., 1956. A Pure Theory of Local Expenditures, The Journal of Political Economy, Vol. 64, N0 5. Wang J., 2018. Strategic interaction and economic development incentives policy: evidence from US States, Regional Science and Urban Economics, Vol 68(C), P. 249-259. Wilson J. D., 1986. A theory of inter-regional tax competition, Journal of Urban Economics, Vol. 19. Wilson J. D., 1999. Theories of Tax Competition, National Tax Journal, vol. 52. Yanqing J., 2015. Education expenditure in China: potential strategic behavior among regional governments, Journal of Chinese Economic and Business Studies, Vol. 13(3), P. 233-246. Zodrow, G. R. and P. M. Mieszkowski, 1986. Pigou, Tiebout property taxation and the under provision of local public goods, Journal of Urban Economics, 19.