Public investment under ethnic diversity and political uncertainty

Arbeitspapier

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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Centre for Economic Research Working Paper Series ; No. WP05/01

Classification and Topics

• Classification: Wirtschaft ; Fiscal Policy ; Fiscal and Monetary Policy in Development
• Subject: political instability ; myopic behaviour ; public finance ; corruption ; political economy ; developing countries

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Bohn, Frank
• Event: Veröffentlichung
• (who): University College Dublin, Department of Economics
• (where): Dublin
• (when): 2005

Further information

• Handle: http://hdl.handle.net/10419/72418
• Last update: 10.03.2025, 11:42 AM CET