Public Infrastructure Spending Research Articles

EVALUATING STRUCTURAL RESILIENCY OF PUBLIC SCHOOLS AS EMERGENCY SHELTERS IN NATURAL DISASTERS

Public schools are the second largest sector of public infrastructure spending following highways, and there are about 84,000 public schools with 100,000 buildings in the United States. In addition to their primary functions as learning facilities, public schools usually serve an important role as emergency shelters and community resilience hubs during and after natural disasters, such as earthquake, windstorm, and flooding. In order to effectively fulfill the secondary function as emergency shelters, the school infrastructures need to be operational during and after the disasters. However, there are gaps between the existing school building structural capacities and the requirements of essential buildings as emergency shelters. In this paper, a generic 3-story steel framing K-12 school building will be analyzed based on the design loads and load combinations specified in ASCE-7: Minimum Design Loads for Buildings and Other Structures. The design loads in ASCE-7 are continuously updated to address the climate changes and new challenges, which will be reflected in the analysis to compare the building design criteria and structural capacities from the past two decades. The structural capacity will be evaluated as an emergency shelter/public assembly (Risk Category IV) during and post disasters, versus a regular school building (Risk Category II or III). Full live loads will be combined with the natural disaster loads to evaluate the school building capacity as a community resiliency hub. The results will be used to assess the structural resilience level of school buildings functioning as emergency shelters in natural disasters.

Can Regional Spending Management Policies Improve Human Development Index?

The management of expenditure carried out by local governments until now is considered not effective and efficient enough, so the government, through Law Number 1 of 2022 (articles 146 and 147) seeks to increase the effectiveness of regional expenditure in regional development by regulating the proportion of employee spending and public service infrastructure spending. This article aims to evaluate regional spending management policies in increasing Human Development Index (HDI) in the Bima regency. This regency was chosen as the research location because it has a fairly large employee expenditure allocation which is 49.29 percent of the total regional expenditure, with an increase in HDI of 0.36. Data analysis was carried out using Tableau applications and cost-effectiveness analysis. The results show that in comparison to other Indonesian eastern districts, the Bima region does not manage regional expenditures efficiently. Meanwhile, the results of the 2022-2025 HDI forecast only increased by 0.611 per year. The estimated HDI in 2024 is 69,02863, which is still far below the 2024 HDI target of 75.54. Suggestively, the Bima regency needs to allocate budgets selectively for the HDI driving sector and decrease the employee spending rate.

Investopedia’s ‘What Is the Keynesian Multiplier?’ Needs to Be Completely Revised to Correct Its Many Errors of Omission and Commission

Investopedia’s “What is the Keynesian Multiplier “ is fundamentally flawed and needs to be completely rewritten in order to eliminate a number of errors of omission and commission concerning Richard Kahn and J M Keynes. First,Richard Kahn’s article ,published in 1931 in the Economic Journal,was derived from Keynes’s earlier work in his A Treatise on Probability ,1921(Brady,2004) and his May,1929(Kent,2007) arithmetic example ,which follows directly from the mathematical model presented in chapter 26 of the A Treatise on Probability on page 315 in footnote 1.The discussion in the General Theory on pp.122-123 of the theory of the multiplier follows directly from the A Treatise on Probability. Second,Investopedia’s article completely ignores the series of articles written by Keynes in 1937 and 1938 in England on war finance and unemployment, first discussed by Terence Hutchison in 1977,demonstrating that Keynes’s support for deficit finance was strictly limited to the occurrence of a severe recession or depression. Third, Investopedia’s article completely ignores the extensive 250 pages of correspondence in Volume 27 of the Collected Writings of John Maynard Keynes detailing Keynes’s explicit support for deficit finance for the support and maintenance of public infrastructure projects only which would pay for themselves overtime in the long run.The government budget would always be balanced..There would be a separate capital account budget devoted to public infrastructure spending that would have to be in balance in the long run. Only the capital account could be in deficit .Keynes’s clear cut disagreement with supporters of deficit financed tax cuts in England in 1942-1944 is explicit in these two hundred and fifty pages (CWJMK,pp.225-475). Fourth,the belief that M. Friedman showed that there were errors in the logical and mathematical construction of the multiplier has no support.M. Friedman never showed there were any mathematical and logical errors in the multiplier concept.

Impact of Road Infrastructure Investments on the Structural Competitiveness of the Burkina Faso Economy

This paper assesses the impact of road infrastructure investments on the structural competitiveness of Burkina Faso's economy over the period 1980 to 2015. The methodology adopted presents, on the one hand, the endogenous growth theory as a theoretical reference framework and, on the other hand, exposes the direct and indirect effects of public infrastructure spending on the performance of the economy. After conducting preliminary tests, an Error Correction Model (ECM) and the results reveal that investment in road infrastructure positively and significantly affects the structural competitiveness of the country's economy. However, this impact varies over time. Indeed, the elasticity of structural competitiveness with respect to road investments is 0.06 in the short term and 0.32 in the long term. In view of these results, the economic policy implication that emerges is that an increase in road infrastructure investment is a policy of increasing the structural competitiveness of the country's economy.

When Voters Matter: The Limits of Local Government Responsiveness

I use over-time variation resulting from geographic sorting to estimate the impact of local preferences on local policy. Building a new panel data set of county-level voting behavior and county-level policy choices, I find a causal impact of changes in preferences on changes in policy. However, this responsiveness is not unlimited. While public safety and infrastructure spending respond, policies more constrained by state laws do not; and while general purpose government spending is responsive, school and special district spending are not. These results corroborate recent evidence of local responsiveness using a more extensive sample, and a research design that rules out many alternative explanations. They also reveal many local policies to be unresponsive due to state-imposed constraints.

Does infrastructure spending lead to price effects in the property market? Evidence from major cities across India

ABSTRACT A recent boost in spending on the public infrastructure across India raises the question: How does the property sector react to massive infrastructure construction? The answer has significant policy relevance. This paper uses panel data across seven major Indian cities, spanning seven years from 2008 to 2014, to ascertain the short- and long-run impacts of infrastructure attributes on property values and rents. The study finds that increases in the percentage of public infrastructure spending lead to a positive effect on the property capitalization rate in India, but have a negative impact on the rental market in the short term.

Brexit and the Future of UK Capitalism

Brexit and the Future of <scp>UK</scp> Capitalism

Samuelson’s Neoclassical Synthesis Did Not Betray Keynes: Keynes Had Offered Just Such a Synthesis in the General Theory, As Well As to Hicks and Harrod in Correspondence, in 1936

In a recent reprint of material taken from R. E. A. Farmer’s recent 2017 book, Prosperity for All, certain misrepresentations of Paul Samuelson’s work and J M Keynes’s work is presented. For example, in the presence of a high unemployment rate, following a severe recession or depression, Samuelson’s prescription is the use of expansionary fiscal policy that involves large government deficits to finance major public works, public goods, and public infrastructure spending to replace the large gap resulting from the collapse in private investment spending. This will increase p, the general price level, while reducing the real wage, w/p. This will result in an increase in employment and a fall in the unemployment. The unemployment rate will start to move back toward the full employment target rate of 4 %. The problem is not that money wages are too high, but that, due to decreased private corporate investment spending, spending on investment goods is too low, so that the overall price level is too high, resulting in a higher than optimal real wage. This higher real wage is misinterpreted as being due to money wages that are too high, while, in reality, it is due to insufficient spending on investment goods that is too low. J M Keynes, in December 1933, invented and taught the IS-LM(LP) model. An inferior version of it was developed by Keynes and appeared in the mid 1934 draft copy of the General Theory. An improved, revised version of it was presented in the General Theory in chapter 15 and chapter 21 on pp.298-299 in 1936. The aggregate price level was not determined in Keynes’s IS-LM(LP) model. It is determined by Keynes in a separate, supporting model, which Keynes called his D-Z model, which appeared in chapters 20 and 21. Keynes developed the Aggregate Supply Curve (ASC) in aggregate Income-employment (D, Y, Z; N) space. This ASC represents a locus of all multiple equilibrium, optimal D=Z outcomes, all of which satisfy the necessary and sufficient first and second order conditions for an expected profit maximum. The first order conditions are that the expected real wage equals the marginal product of labor. Keynes presented two simplified versions of his ASC on pp.295-296 of the General Theory, which has the familiar completely horizontal, completely elastic, range of the standard textbook aggregate supply curve in (O,P) space where O=a function of N, and PO equals aggregate income. PO is Keynes’s Y; pO, expected aggregate income, is Keynes’s D. N is aggregate employment. Both Keynes and Samuelson realized that Frisch’s reconstituted version of K. Wicksell’s rocking horse (pendulum) model could only involve negative feedback. It does not, and could not, involve the positive feedback effects resulting from the interaction of the multiplier and accelerator models, first presented by Keynes in his correspondence with Harrod in August, 1938, in discussions over his economic growth model using a first order, difference equation, and simultaneously presented by Samuelson in 1939-1941 by the use of difference equations. Microeconomic optimizing approaches, (individual, rational utility maximizing and profit maximizing problems) based on pendulum models, which have purely negative feedback effects that are self-correcting over time, have no explanatory significance or policy application at the macro level. All that it is possible to say at the macro level is that the dynamic equilibriums are either stable or unstable. It is impossible to conclude that they are optimal or non-optimal in terms of aggregate employment or aggregate “output”.

Public Infrastructure Investment, Institutions, and Economic Dynamism in the United States

Physical infrastructure is an aspect of a region’s entrepreneurial ecosystem and previous studies suggests that infrastructure is positively associated with entrepreneurial activity, a key component of economic dynamism. This small body of literature have largely focused on the stock of infrastructure, ignoring the costs of developing infrastructure as well as potential complementarities between infrastructure and other elements of the ecosystem. This paper examines the relationship between US state-level public infrastructure spending and economic dynamism over the period 1992-2015. The results suggest that infrastructure spending exerts a short-term negative impact on the establishment entry, birth and total job creation, and net job creation rates. The analysis also considers whether the effect of infrastructure development on dynamism is moderated by several other elements of the entrepreneurial ecosystem such as institutions (i.e., corruption), public policy (i.e., labor market frictions), and/or human capital.

How a race to the bottom can make you fat

ABSTRACT This article measures the effect of fiscal competition on obesity rates in the United States through education and health spending. We hypothesize that fiscal competition to attract firms results in lower business tax revenues and higher public infrastructure spending which crowds out education and health spending leading to an increase in obesity rates. We empirically test this hypothesis. We find that there is significant fiscal competition to attract firms. Next, we show that when business tax revenues are lowered and public infrastructure spending favouring businesses increased, public health and education spending declines and obesity rates significantly increase. Thus, fiscal competition significantly contributes to obesity rates through the education and health spending channel.

An Analysis of Public Debt Servicing in Zambia: Trends, Reforms and Challenges

Abstract The main goal of this paper is to discuss the dynamics of public debt servicing – both domestic and foreign – in Zambia, tracing the trends, reforms and challenges over the period from 1964 to 2015. The paper shows that the exceptional rise in public debt servicing obligations in Zambia over the period under review has been principally due to high domestic and foreign interest rates, frequent debt rescheduling at commercial rates, and capitalisation of non-liquidated service obligations at commercial rates. Also revealed in the paper is the fact that prior to 2005, Zambia experienced severe public debt servicing problems which eased after 2006 owing to debt relief initiatives and an economic rebound. Among the government debt service reforms discussed in the paper are structural adjustments in foreign exchange management, fiscal and monetary reforms, and aggressive engagement of traditional creditors. Primary among the identified challenges of public debt servicing in Zambia was the insistent economic crises that dogged the country during the study period. Notwithstanding the current public debt service sustainability and remarkable economic performance that characterise the country today, the paper found that the recent contraction of nonconcessional loans by the state poses a threat to debt service sustainability in future. Hence, the paper recommends, among other things, for aligning of public sector infrastructure spending with revenues to ensure budget sustainability, and to continue diversifying the economy to minimise the impact of external commodity price shocks on the economy.

U.S. industry applauds Trump’s infrastructure plan

Chemical companies are welcoming President Donald J. Trump’s long-awaited $1.5 trillion plan to rebuild aging U.S. infrastructure systems. “Building and repairing the nation’s network of roads, rails, and waterways will create jobs and strengthen America’s efficiency and, by extension, our economy for generations,” Dow Chemical says in a statement. “Dow and the chemical industry, as well as countless U.S. workers and citizens, will benefit from the President’s proposal to invest in our infrastructure.” The framework, released on Feb. 12, seeks congressional approval for $200 billion in direct federal funding. The administration expects the federal allocation will draw matching funds from cities, states, and the private sector, resulting in a $1.5 trillion total investment in repairs and new construction. In recent years, states have assumed a greater share of public infrastructure spending, and the White House wants to accelerate that trend. Modernizing and repairing the nation’s transportation infrastructure is critical for

U.S. industry applauds Trump’s infrastructure plan

Chemical companies are welcoming President Donald J. Trump’s long-awaited $1.5 trillion plan to rebuild aging U.S. infrastructure systems. “Building and repairing the nation’s network of roads, rails, and waterways will create jobs and strengthen America’s efficiency and, by extension, our economy for generations,” Dow Chemical says in a statement. “Dow and the chemical industry, as well as countless U.S. workers and citizens, will benefit from the President’s proposal to invest in our infrastructure.” The framework, released on Feb. 12, seeks congressional approval for $200 billion in direct federal funding. The administration expects the federal allocation will draw matching funds from cities, states, and the private sector, resulting in a $1.5 trillion total investment in repairs and new construction. In recent years, states have assumed a greater share of public infrastructure spending, and the White House wants to accelerate that trend. Modernizing and repairing the nation’s transportation infrastructure is critical for

Maximizing Efficiency in State Infrastructure Finance: The Role of Competition, Citizen Monitoring Capacity, and Institutions

In the United States, despite record levels of public infrastructure spending, evidence on rising traffic congestion and deteriorating infrastructure condition raises questions about the efficiency of government infrastructure spending. This research aims at empirically assessing and explaining the relative efficiency in producing public highway infrastructure outcomes among American states. To achieve this purpose, a semiparametric analysis—the two-stage double bootstrap data envelopment analysis method—is applied to examine how highway infrastructure efficiency scores can be estimated and explained by a number of exogenous variables among 47 American states from 1995 to 2009. This study finds that there is a large efficiency variation among states in terms of producing quality highway infrastructure services. Furthermore, interstate competition, jurisdiction size, fiscal capacity, and political and fiscal institutions are the key factors influencing the efficiency performance of state highway infrastructure systems.

Non-Linear Effects of the Deficit on Public Investment: Case of WAEMU Countries

This paper proposes an assessment of the non-linear relationship between public deficit and public investment in debt situation. We use an endogenous growth model, with productive public spending, that we test empirically using the interaction model of Brambor and al. (2006), over the period 1980-2015, in WAEMU countries. The results of the estimates show a change in the regime of the relationship between public investment and public deficit for public debt level equal to 75% of GDP. When public debt is below this threshold, any increase in the deficit has an expansive effect on public infrastructure spending. When public debt is above the threshold of 75% of GDP, an increase in the deficit has a recessive effect on public investment.

Does money matter for infrastructure outcomes? The effects of public infrastructure finance on state infrastructure quality

Given the significant amount of public infrastructure spending and the widely expressed concern about the declining quality of the American public infrastructure system, research about the effectiveness of public infrastructure investment is especially timely and crucial. The study extends public service production theory and public choice theory to the public infrastructure field, and develops a realistic and full theoretical model of public highway production by taking state highway efficiency differences into account. The panel fixed-effects method is used to examine the effects of state highway finance on state highway infrastructure quality. This study finds that state highway maintenance spending plays a crucial role in improving state road and bridge quality. Moreover, highway efficiency elements matter for state highway infrastructure quality.

How Does Public Deficit Affect Public Investment in Senegal?

Purpose: This paper proposes an assessment of the non-linear relationship between public deficit and public investment in debt situation.Methodology: We use an endogenous growth model, with productive public spending, that we test empirically using the interaction model of Brambor et al. (2002), over the period 1980-2015, in Senegal.Results: The results of the estimates show a change in the regime of the relationship between public investment and public deficit for public debt level equal to 80% of GDP. When public debt is below this threshold, any increase in the deficit has an expansive effect on public infrastructure spending. When public debt is above the threshold of 80% of GDP, an increase in the deficit has a recessive effect on public investment.Policy recommendation: An important contribution of this study is to show that the PCSCS implemented in the WAEMU zone cannot register only in a nominal sense to inking with the euro. The budgetary rules laid down in the Stability Pact should be studied in depth. The study would benefit from further study. One of the extensions of this study would be to determine the impact of this debt threshold of 80% on long-term economic growth in Senegal.

Public Investment and Monetary Policy Stance in the Euro Area

This paper evaluates the macroeconomic impact of a programme for public infrastructure spending in the euro area (EA) under alternative assumptions about funding sources and the monetary policy stance. The quantitative assessment is made by simulating a dynamic general equilibrium model of a monetary union with region-specific fiscal policy. The main results are the following. First, EA-wide stimuli are more effective than unilateral (region-specific) stimuli. Second, under EA-wide stimulus, the fiscal multiplier is close to 2 if the forward guidance (FG) on the short-term policy rate holds. Third, if the monetary authority keeps down both the policy rates (with FG) and the long-term interest rates (with quantitative easing), the fiscal multiplier exceeds 3 at peak and investment spending is self-financing. Fourth, the financing method is relevant: debt financing, particularly under an accommodative monetary policy stance and if the sovereign spreads do not increase, is more growth-friendly than tax financing in the short-term (but not in the long-term). Fifth, the effectiveness of the fiscal stimulus is larger if government spending is directed towards productive goods and its implementation occurs efficiently and without delays.

Kenya: Request for an Extension of the Arrangement Under the Extended Credit Facility-Press Release; and Staff Report

This paper requests an extension of the 12-month Stand By Arrangement and the Standby Credit Facility Arrangement to obtain enough time to finalize fiscal measures for 2015/16 and implement structural measures under the program. Although at a slower-than-projected pace, the economy continued to expand robustly. Driven by public infrastructure spending, buoyant credit growth, and strong customer demand, real GDP is estimated to have grown by 5.6 percent in 2015. As per the staff's assessment based on recent data, performance under the current program remains broadly satisfactory. Staff fully supports the authorities' request for extensions of the arrangements through March 15, 2016.

Exploration and enlightenment of the compensation mechanism reform featuring drug sale with zero makeup

The paper summarized the explorations of public hospital pilots in the compensation mechanism and identified the following findings. For example, by means of fiscal support of public hospital infrastructure and development spending, cancellation of drug markup, higher service prices, and reformed payment mode of medical insurance, these hospitals have made initial changes at their business operating mechanism, motivation-guidance of compensation, and their makeup of medical revenue. In addition, such hospitals are found with lower cost of medical care per visit, and higher income of medical workers. The authors also pointed out such problems as inflated drug pricing and expenses, lack of scientific pricing mechanism for medical services, vague definition of policy-related losses, and old-fashioned practice of government investment and health insurance payment. Based on such findings, the paper advised to adjust health care prices by stages and to improve the management of health insurance and the coherence of compensation mechanism. Key words: Public hospital; Compensation mechanism; Price adjusting; Pilot