Private investment in transportation infrastructure in Brazil: the effects of state action

Fernando Vinícius Da Rocha,Maria Sylvia Macchione Saes

doi:10.1108/rege-03-2018-032

Abstract

Purpose The purpose of this paper is to discuss the impacts of the investment programs created by the Brazilian federal government on private investment in transportation infrastructure (crowding-in effect). Design/methodology/approach The study used two quantitative techniques of data analysis: cluster analysis and panel data analysis. Findings The results show that the investment programs created by the Brazilian federal government were successful in attracting private agents to invest in transportation infrastructure in the country. This effect is observed even in the cases of programs focused on public investments. Research limitations/implications Advancing the research area that seeks to assess the impact of public policies is the main practical and social implications of the papers. As a research limitation we can highlight that need for a comparison to other country investment’s public policies. Practical implications Performance of public policies. Social implications Economic development. Originality/Value The paper discusses the effects of the Brazilian Federal Government programs for infrastructure investment in the private investment in the country (investment in transportation infrastructure). The issue is relevant for policies makers.

Highlights

Contrary to the traditional argument that investments in logistics infrastructure is the duty of the state, some emerging countries have experienced a clear upward trend in private investments in transportation infrastructure, especially since the beginning of the 1990s (World Bank, 2015a, b, c, d)
4.1 Cluster analysis The output of the cluster analysis divides the ten countries that received the most investments in transportation infrastructure from the private sector into five distinct groups, based on institutional, logistics infrastructure, size, and economic growth variables
In relation to PAC, the results show that the program focuses on investments made by the state, the fact that priority is given to the infrastructure sector in the country is decisive in attracting the private sector to make investments

Summary

Introduction

Contrary to the traditional argument that investments in logistics infrastructure is the duty of the state, some emerging countries have experienced a clear upward trend in private investments in transportation infrastructure, especially since the beginning of the 1990s (World Bank, 2015a, b, c, d). Along with this increasing participation of the private sector, economic liberalism claims that the state should limit itself to setting rules in favor of private investments, since its presence in the production sector would restrict the action of private investors in the economy, the so-called crowding-out effect (see e.g. The Heritage Foundation, 2015). Have the state’s investment programs in transportation infrastructure had any positive effects on private investment in Brazil since the 1990s?

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Results

Conclusion