We found a match
Your institution may have access to this item. Find your institution then sign in to continue.
- Title
THE FORGOTTEN RATIONALE FOR POLICY REFORM: THE PRODUCTIVITY OF INVESTMENT PROJECTS.
- Authors
Isham, Jonathan; Kaufmann, Daniel
- Abstract
Using economic rates of return from World Bank-funded investments, we investigate how country characteristics and policies that influence aggregate performance affect investment productivity. Controlling for other characteristics, countries with undistorted (distorted) macroeconomic, exchange rate, trade, and pricing policies have highly productive (unproductive) investments. No type of project—in tradable or nontradable sectors—can be ''insulated'' from poor policies, where returns on investments are about ten percentage points lower. Productivity increases when policies improve within a country. Projects are also affected, nonlinearly, by the size of the public investment program where policies are undistorted. The results offer new evidence on benefits from policy reform and challenge conventional cost-benefit analysis.
- Subjects
RATE of return; INVESTMENTS; WORLD Bank Group; FOREIGN exchange rates; PRICING; CAPITAL investments; FINANCIAL performance; COST effectiveness; MACROECONOMICS
- Publication
Quarterly Journal of Economics, 1999, Vol 114, Issue 1, p149
- ISSN
0033-5533
- Publication type
Article
- DOI
10.1162/003355399555972