Effectiveness of public investment on growth in sub-Saharan Africa

摘要: The aim of the paper is to explain why public investment may not be as effective expected in promoting growth some countries, especially low-income countries sub-Saharan Africa. Given unquestionable importance for private capital accumulation and economic growth, this low effectiveness can lead serious problems economies, such low-investment trap. In literature, there are several different reasons given, quality institutions, possible determinants productivity investment. While controlling other factors, provides two new explanations investment: threshold effect volatility It proposed that effectively promote only if it high (threshold effect) stable (volatility enough. paper, a simple model illustrates impacts level on growth. Empirical analysis then follows. covers period 1980–2014 large set where negative consequences effects have been felt strongly. order identify first classified based their income levels. empirical analysis, indicators governance, which also important investment, included control impact corruption. results indicate indeed much lower per capita terms well highly volatile relatively countries. For group even though still statistically significant determinant development, less increasing larger middle- high-income regression provide clear evidence significantly declines when its below threshold. findings higher rates significantly, highest.