Public investment under ethnic diversity and political uncertainty

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Title: Public investment under ethnic diversity and political uncertainty
Authors: Bohn, Frank
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Date: Jan-2005
Online since: 2009-07-23T15:53:16Z
Abstract: This paper addresses the puzzle that public services in some developing countries, especially in Africa, are poor despite large public expenditure. The intertemporal model here studies a government’s optimal choice between redistribution and public investment. Ethnic diversity and political uncertainty reinforce one another in producing myopic government behaviour which results in underinvestment. Above some critical value of political instability, it is optimal for the government not to invest at all.
Type of material: Working Paper
Publisher: University College Dublin. School of Economics
Series/Report no.: UCD Centre for Economic Research Working Paper Series; WP05/01
Keywords: Political instabilityMyopic behaviourPublic financeCorruptionPolitical economyDeveloping countries
JEL Codes: E62; O23
Subject LCSH: Municipal services--Developing countries
Fiscal policy--Developing countries
Developing countries--Appropriations and expenditures
Political stability--Developing countries
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Language: en
Status of Item: Not peer reviewed
This item is made available under a Creative Commons License:
Appears in Collections:Economics Working Papers & Policy Papers

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