Abstract This paper revisits the issue of the public investment multiplier through the lens of complementarity or substitutability between private inputs and public infrastructure capital. Our main result is that public investment multipliers are much larger than in the literature when private inputs and public capital are good complements relative to the canonical Cobb–Douglas case where the degree of complementarity is unity, and, at the same time, public capital is in relative shortage, meaning that it acts as a ‘weak link’ in production. Within this framework, the stronger the degree of complementarity (respectively substitutability), the larger (respectively smaller) the size of the multiplier. The model is solved numerically by choosing its parameters according to UK data. The model's positive and normative implications are then compared to current values of policy variables in the UK economy.

Abstract This study utilizes a Bayesian Dynamic Stochastic General Equilibrium model, calibrated with Chinese data, to assess the impact of public investments, which account for about 16.2% of China’s GDP. Despite an expected public capital stock of 256% of GDP, based on a 4.6% depreciation rate and a 0.73 efficiency rate of public investment (emerging-economy estimate), the actual figure stands at 152%. This significant discrepancy underscores the inefficiencies in public investments, with 43% of public investment expenditures enhancing the capital stock. The output elasticity (productivity) of public capital is estimated at just 3%, substantially lower than the previously estimated 8% for emerging economies, and has declined to 2% in the post-2008 period. Simulations based on these efficiency and productivity metrics reveal that the output multiplier of public investment is 0.7. China’s public investments reduce TFP, crowd out private investment, and raise the public debt-to-GDP ratio in the medium term.

Rising public debt has become a central policy concern as governments increasingly rely on borrowing to finance development and recovery programs. Yet the impact of debt on growth remains debated, depending on how effectively countries manage and allocate borrowed resources. This study examines the relationship between public debt and economic growth, with governance quality as a moderating factor. Anchored in an extended neoclassical framework, public debt is treated as a financing tool whose effect depends on governance quality and fiscal allocation. Using panel data from 188 countries for 1996–2023, the analysis applies fixed-effects and instrumental-variable estimations based on non-overlapping five- and ten-year averages to capture medium- also long-term dynamics while addressing endogeneity. The results show that debt reduces growth when governance is excluded; however, the effect becomes positive and significant once governance interactions are included—especially in the five-year model with lagged debt as an instrument. By contrast, the three-way interaction among debt, governance, and public capital is insignificant in the medium term, suggesting that investment effects may require longer horizons or stronger institutional alignment. Overall, the findings highlight that sound governance and efficient fiscal allocation are prerequisites for transforming public debt from a fiscal burden into a driver of sustainable economic growth.

ABSTRACT I develop a stock-flow consistent model that incorporates public sector into economy and offers a novel framework to evaluate the long-term economic consequences of government budgetary decisions. In this model, both government consumption and investment enter the aggregate income; however, public investment adds up to the public capital stock. The productivity of the private capital depends on the public capital stock due to congestion effects. The composition of public spending, however, depends on fiscal rules. I simulate two scenarios: a balanced budget fiscal rule and a ‘golden rule of public investment’. The investment-friendly fiscal rule requires public deficits, but it induces a higher growth rate, a higher capacity utilisation, and, eventually, a lower debt-to-output ratio than the balanced budget rule. I conclude that a policy that boosts productivity is more effective for fiscal sustainability than focusing on reducing the public deficit.

This article analyzes statistical approaches to evaluating the effectiveness of state capital investments in the context of socio-economic development in Ukrainian regions. It identifies the need for a quantitative analysis of the relationship between budgetary allocations and key regional development indicators: gross regional product, employment levels, entrepreneurial activity, export openness, and environmental status. To ensure the reliability and validity of the conclusions, various statistical methods were applied, including descriptive statistics, data normalization, linear correlation analysis, multivariate averaging for integral assessment, and rank correlation to examine relationships between ratings. The proposed author’s approach to a comprehensive assessment of regional market conditions is based on the multivariate mean method with data standardization by range. This allowed for the creation of an integral regional rating, clearly identifying leaders and outsiders in market development dynamics. Statistical analysis, conducted using Statistica software, revealed significant correlations between investment flows and socio-economic indicators. Particular attention was paid to investigating the relationship between economic ratings and the environmental status of regions, which showed a moderate inverse correlation. This indicates an existing contradiction between economic activity and environmental balance, emphasizing the importance of integrating ecological aspects into development strategies. Based on the results obtained, practical recommendations were developed to improve regional investment policy. These include increasing the targeting of funding, strengthening analytical monitoring of investment effectiveness, and diversifying funding sources to maximize positive impact. The study’s findings provide a valuable foundation for strategic regional development planning, especially under budget constraints, and contribute to achieving balanced and sustainable growth.

The institution of subsidies in the theory of public choice is presented as a mechanism of consensual decisions by state and municipal authorities, depending on legislative and local initiatives. The subsidy process is characterised by the concepts introduced in the works of D. North, O. Williamson, D. Commons. The indicators for assessing the quality of the Russian institute of subsidies to local governments are identified. On the basis of sample data on fifty regions of Russia in 2019 - 2024, the quality of this institution is assessed. The signs of adaptation in the subsidy institute to external factors from the early 2000s to the present are highlighted. Although strict budget constraints are observed, there is a decrease in transparency, growing uncertainty and transaction costs. As a result, public capital is being eroded, which weakens incentives for local authorities to develop their own sources of revenues, creates opportunities for corruption and voluntarism, and forms a negative public opinion about the process of transfer distribution. It is necessary to change the existing procedures of subsidising by federal and regional authorities and transition to a more effective institutional design in the process of granting subsidies to municipalities.

The concept of sustainable development has now gained a “second wind” in the context of the updated national agenda for the socio-economic development of the country, defined by President of the Russian Federation Vladimir Putin for the next five to ten years. Human capital and business social responsibility are becoming a powerful driver for the implementation of national goals, which are based on the principles of human-centricity. The subject of the research is tools for assessing responsible business conduct and stimulating the contribution of organizations to achieving Russia’s national development goals. The purpose of the work is to identify modern tools for monitoring and evaluating responsible business conduct that meet the interests of the state, and initiatives that encourage businesses to proactively engage in achieving the country’s national development goals. The article discusses the principles of human-centricity and the best domestic practices in assessing the human-centricity index, and defines its social mission for both company employees and society. The analysis of the provisions of the draft standard of public capital of business and the standard of reporting on sustainable development is given, their interrelation is shown. A set of universal and individual essential topics applied to the disclosure of sustainable development in human capital is proposed. The importance of implementing specific indicators within the framework of these significant topics in financial reporting indicators is substantiated. It is concluded that it is important to develop indicators that comprehensively reflect the company’s contribution to achieving Russia’s national goals set for the period up to 2030 and for the future up to 2036.

Purpose: The study investigates the effect of implementation capacity on the relationship between the internal, external and PPP infrastructure financing methods and the success of public capital projects in Kenya. Materials and Methods: Using positivistic approach, the study adopted descriptive cross-sectional design to analyze data from high-impact infrastructure projects in the roads, energy, and water & sanitation sectors under Kenya’s Medium-Term Plans (MTP I and MTP II). A sample of 313 projects were purposively and randomly selected covering the three types of infrastructure projects and ensuring representation across all regions of the country from projects developed in the three sectors over the 10 year period. A response rate of 260 high-impact infrastructure projects (representing 83%) was achieved with secondary data on cost and time overruns, for each of the three identified infrastructure financing methods analyzed using ratio scale, and primary data collected from the project managers' perceptions of implementation capacity using Likert Scale of 1 to 5 where 1 was the lowest and 5 was the highest. Findings: The study findings show that the effect of implementation capacity on the relationship between internal financing and success of public capital project in terms of costs overrun was negative; for external infrastructure financing positive; and for PPP financing negative. In the case of time overruns the effect on internal infrastructure financing was positive; for external financing the effect was negative; and on PPP infrastructure financing the effect was negative. The study also notes that out of the four factors explaining the implementation capacity, payment to the contractors exhibits the highest risk. Unique Contribution to Theory Practice and Policy: The study recommended that the government prioritize external financing over internal financing; strengthen implementation capacity by improving the payment to contractors; and further study be made on PPP financing once more capital projects are developed using this mode of financing.

Introduction: Social participation expands social and public capital of society, and organizational citizenship behavior contributes significantly to organizational management. However, job burnout can have negative effects on individual, family, and social relationships. The aim of the present study was to investigate the relationship between social participation and organizational citizenship behavior and the mediating role of organizational fatigue in employees of the healthcare network in Lenjan city. Method: This cross-sectional study was descriptive-analytical conducted in 2024. A total of 205 people (79 men and 126 women) were selected as study samples. The study subjects were selected from the healthcare network personnel of Lenjan County, Isfahan Province by simple random sampling (Professional, expert and doctor). To collect data, standard questionnaires were used: Employee Social Engagement (Dorsetkar et al. 2010) with a Cronbach's alpha above 0/8, Oregon and Kanoxi Organizational Citizenship Behavior (OCB ) with a Cronbach's alpha of 0/76, and Swedish Job Fatigue (SOFI-20) with a Cronbach's alpha of 0/95. The analysis of the obtained data was performed using SPSS statistical software version 26 at a significance level of 0/05 with a correlation test. Results: The results showed that the mean of the social participation variable in the studied samples was 77/83±11/47. The mean (standard deviation) of the social citizenship behavior variable in the studied samples was 53/95±3/06. The mean (standard deviation) of the job fatigue variable in the studied sample was 89/30±4/01. In the final model, the job fatigue variable is a partial mediator variable in the relationship between social participation and organizational citizenship behavior. Conclusion: The findings suggest that increasing employee social participation can lead to improved organizational citizenship behaviors. On the other hand, organizational citizenship behavior and social participation are also inversely related to job burnout, meaning that strengthening such behaviors may help reduce job fatigue.

Abstract This article explores spatial convergence in Morocco to assess whether the benefits of development are equitably distributed across regions, recognizing that growth in one region can influence its neighbors. It examines employment convergence, focusing on the role of human and public capital within a framework of geographical interdependencies. The goal is to test whether these forms of capital contribute to reducing employment disparities between regions. Combining a comprehensive literature review on economic convergence with an empirical analysis specific to Morocco, the study reveals that public capital, especially capital expenditures and the presence of public institutions, plays a critical role in driving convergence. Similarly, human capital, measured by school enrollment rates, contributes to reducing employment inequalities and fostering balanced regional development. The research highlights that investments in both human and public capital, particularly in infrastructure and education, are essential for narrowing regional employment gaps. The SDM model, which captures both endogenous and exogenous interactions, is found to be the most reliable for understanding these dynamics. The study further estimates the economic catch-up speed between regions at 5.5%, indicating slow progress. At this rate, less-developed regions are moving toward the employment levels of more prosperous regions at a yearly pace of 5.5%. This gradual advancement reflects deep-rooted structural and socio-economic challenges, requiring sustained efforts over time. The projected half-life of over 16 years suggests that it will take more than 16 years to halve employment disparities, underscoring the long-term commitment required to achieve significant convergence.

ABSTRACTThis study develops a dynamic stochastic general equilibrium model calibrated to the US economy to investigate the effects of government investment on macroeconomic variables and social welfare. The analysis focuses on the role of the gap between the announced size and actual implementation. In general, government investment shocks bring positive results for output in the short‐ and long‐run, although they may cause consumption crowding out in the short‐run. However, anticipated government investment lowers the consumption crowding‐out effect. Higher levels of implementation relative to the announced investment positively impact output and consumption in the medium‐ and long‐run. The benefits to the economy are greater when the productivity of public capital is higher. Moreover, the study uncovers a trade‐off between social welfare and the government multiplier: Full or over‐implementation of public investment results in significant social welfare gains without compromising the benefits in terms of the government multiplier.

Purpose: This study examined the impact of infrastructure financing on the successful implementation of public capital projects under Kenya’s Vision 2030. It specifically focused on the mediating influence of external socio-economic and political factors and aimed to identify the extent to which these variables influence project success. Materials and Methods: A positivistic approach was adopted, utilizing quantitative data and hypothesis testing to generate conclusions. The study employed a descriptive cross-sectional research design to analyze high-impact infrastructure projects in the roads, energy, and water & sanitation sectors over the past decade under Kenya’s Medium-Term Plans (MTP I and MTP II). Data were collected from 313 projects, including 220 in roads, 20 in power and energy, and 73 in water and sanitation, achieving a response rate of 83.07%. Descriptive statistics, multiple linear regression, and factor analysis were used to explore relationships between infrastructure financing, project success, and external environment factors. Findings: The study revealed that infrastructure financing significantly influenced the success of public capital project implementation, while the external socio-economic and political environment mediated this relationship. However, these factors alone did not sufficiently explain cost and time overruns, suggesting that other unexplored variables contribute to these project inefficiencies. Implications to Theory, Practice and Policy: The findings imply that existing theories on project success must consider additional variables beyond financing and external environments to explain cost and time overruns. In practice, implementing agencies should enhance internal assessments and risk management, particularly for projects financed through public-private partnerships (PPPs). Policymakers, including the Government of Kenya, should prioritize governance frameworks and robust risk management strategies to mitigate external environmental risks, thereby improving the success rate of Vision 2030 projects.

This work focused on establishing spatial effects in a convergence model that considers the relationship between municipal economic growth, fiscal transfers and investment in public capital. The annualized variation in GDP per capita of 1,100 municipalities is used as a result variable and the natural logarithms of the initial level of GDP per capita, national transfers per capita and gross fixed capital formation per capita are used as explanatory variables. Different spatial econometric models and spatial weighting matrix options were explored. Slight convergence is evident that decreases over time when the initial GDP per capita is considered, and slight divergence when this variable is considered in the neighborhood. On the other hand, significant direct and spatial effects were found, negative for fiscal transfers and positive for investment in public capital.

Public Capital Budgeting: Institutional frameworks, challenges and global best practices

The right to social security has been a theme of attention and debate, not only regarding its nature, but also how it is to be accomplished and ensured. This article intends to contribute to this discussion by stating, in the Author’s opinion, what is the nature of the right to social security and how the Portuguese State has created its system to accomplish the duty that is set upon on it. This system is thrice divided and subsequently composed of subsystems and different regimes. Furthermore, the Author also analyses the established forms and sources of financing needs of social security, and verifies how these are allocated to the different systems, without disregarding the needs that they could have in acquiring a balance between them. Lastly, it is discussed how the public capitalization system with Social Security Financial Stabilization Fund was created to act as a reserve fund and as a safety net of the contributory system of the social security system.

In the EU member countries that obey the rule of law principle, the legislative work of the parliament supports the market economy by producing public capital. In many cases, legislation is connected to public investment projects, and sometimes also to socially important private projects. Both include public benefits and costs, but also public risks. Moreover, as the public commitment to major private undertakings may preclude both immaterial and material contributions, there is a noteworthy threat that an accidental actualization of the remainder risk caused by some unforeseen incident would fall heavily on the taxpayers. This paper constructs a club theoretic model for the analysis of representative democracy. In the model, the public commitment to a private project is decided by the simple majority voting rule in the parliament. The analysis shows that strict assessment of the remainder risk may halt the whole undertaking implying that the promised social benefits are also lost. As a solution, we propose a constitutional Investment Fund, which would launch short-maturity public bonds to citizens and pension funds, earmarked to the material part of the public commitment to private projects. The system could partly privatize the public remainder risk so that only the immaterial part remains to common taxpayers thus increasing the probability of a majority vote for the project. At the same time, the government would get equity finance for its investments, and the citizens and pension funds would hold securities with tangible net asset value. The system should increase precision in public debt and risk management and bring democracy, public governance, and the market economy closer to each other.

ABSTRACT Empirical evidence on how investment in public capital by different levels of government plays a role in influencing socioeconomic development within the context of decentralized developing countries has been relatively limited. Using a case study of Indonesia, this paper aims to analyse the relationships between regional public infrastructures developed by different levels of government using different sources of budget and regional socioeconomic development. To achieve this goal, this paper utilizes a longitudinal data at district/city level, covering over 513 districts and cities in the country, for the period of 2010–2017. Our results show that, compared to those developed by district/city governments, infrastructures developed by provincial governments using their infrastructure budgets or utilizing national government infrastructure budgets deconcentrated to them have been more effective in inducing regional socioeconomic development in their regions. This paper recommends that the Indonesian government enhance the roles of provincial governments in developing regional infrastructure and provide strong incentives to support districts and cities in planning and implementing infrastructure projects.

The automotive sector, where the highest foreign investments are made in the world, plays a critical role in the economic development of countries. The reason why the automotive sector is the locomotive in the development of national economies is that it has strong ties with other industrial branches of the economy in the production process. Therefore, the sector is seen as a strategic development tool by governments. Therefore, supporting the sector through various incentives or direct public capital is a long-standing development policy. In this study, the development stages of Turkey's automotive industry, the policies pursued by the state to strengthen the automotive industry, and other factors that contributed to the development of Turkey's automotive industry are examined specifically through Turkey's two domestic automobile initiatives (Devrim and Togg). In line with the aim of the research, studies on the automotive sector in Turkey from the Ottoman period to the present have been analyzed. In particular, a detailed literature review was conducted with the studies on Turkey's first domestic automobile initiative, Devrim cars. The resource dependency theory, which is considered to be related to the subject of the study, was examined and then the relationship between the state and the business world in Turkey was briefly summarized. Finally, the role of the state in Turkey's domestic automobile initiatives (Devrim and Togg) was analyzed.

PurposeWe examine the association between conditional conservatism in initial public offering (IPO) underpricing and post-issue stock market survival in the U.S.Design/methodology/approachWe adopt an archival approach by collecting data for 1,761 U.S. IPO issuers for the period 1990–2017. Regression analyses are conducted to evaluate the association between conditional conservatism in initial public offerings with underpricing and post-issue stock market survival. We identify firms that went public in the period 1990–2012. These firms are then followed for five years after the IPO to assess their stock market survival.FindingsWe find that pre-issue conditional conservatism is significantly associated with less IPO underpricing. We also detect that IPO firms with higher levels of conditional conservative reporting are more likely to survive in the post-IPO stock market in the three-, four-, and five-year periods after the IPO. Our main findings are robust after controlling for other factors in our models, such as IPO cycles, venture capitalists, research and development investment, and pre-IPO accounting performance.Originality/valueWe extend research by demonstrating that conditional conservative reporting practices help firms reduce their indirect costs of raising their initial public capital. Additionally, our research introduces new evidence on the association between pre-IPO conditional conservatism and after-issue stock market survival. Our findings empirically support the International Accounting Standards Board’s (IASB) decision to reintroduce the concept of prudence into the conceptual framework, by showing how conservative reporting can reduce information asymmetry in IPO firms.

This research contributes to the ongoing discourse concerning the efficiency of public capital and its influence on the productivity of private capital and total factor productivity within African economies. Employing the standard production approach, we include public capital as a distinct input to assess its specific impact on output growth and the enhancement of total factor productivity. We argue that public capital, predominantly manifesting through infrastructure, constitutes an indispensable element for fostering growth. Fundamental to the productivity of private capital is its reliance on a sufficient stock of public infrastructure for operational efficiency. Our empirical analysis reveals that public capital exhibits a substantive long-term influence on output growth and the productivity of private capital. However, in the short term, the discernible impact of public capital is less pronounced. Moreover, while public capital emerges as a noticeable factor in output growth, its influence on total factor productivity remains relatively subdued.