Efficiency Of Public Investment Research Articles

Market Risk Factors Analysis on Public-Private Partnerships in the Livestock Sector

Abstract Currently, the projects that can be carried out through Public Private Partnerships in the livestock sector are under the influence of specific market risk factors, with a great impact on the efficiency of public or private investments and their success. This research aims to analyze some of the market risk factors that affect the organization and operation of Public Private Partnerships in the livestock sector. Therefore, the paper seeks to obtain the answer to the question: What is the way in which market factors influence the functionality of Public Private Partnerships? In this context, we considered necessary and appropriate to achieve a comparative analysis of the main indicators in the field of demand, supply and prices of livestock products in Romania, EU 27 average and some EU developed countries. The data were provided by Eurostat, AgriData and Faostat and cover the period 2014-2022. The analysis of available data for the period 2014-2022 suggests that fluctuations in the supply, demand and prices of livestock products can be considered factors affecting the functionality of PPPs, through two-way transmission mechanisms. This can help in developing more robust strategies and policies for managing risks and capitalizing on opportunities within Public Private Partnerships.

Efficiency of public investment in education in Peru, 2016-2022: A comparative analysis by region

The study analyzes the level of technical efficiency of public investment in Education at the primary and secondary level in Peru, 2016 to 2022. Data envelopment analysis – DEA was used and for the association between the provision of resources and educational quality. the panel data fixed effects model. The results indicate that there are relative differences in efficiency between the regions, registering an average score of 49% for the primary level and 38% for the secondary level, with the most efficient being Moquegua, Tacna, Arequipa and Ica, and the least efficient being Loreto, Huánuco, Ucayali, and San Martín. From the input-output association, classroom size, infrastructure in good condition and public investment have a direct relationship, while students per teacher and per computer, the relationship is inverse with respect to educational achievement in communication and mathematics at the primary and secondary level. This suggests that inefficient regions should increase educational attainment at the primary and secondary levels by an average of 51% and 62%, respectively, while maintaining the same level of spending. Therefore, to improve their efficiency within the framework of public policies, they can adopt the management implemented by regions such as Moquegua and Tacna.

Una historia trans sexenal de dispendio de recursos sociales: El Tren Interurbano México-Toluca

The general objective of this paper is to make an ex-post evaluation of the Mexico-Toluca Interurban Train project (TIMT) more than nine years after the beginning of its construction stage. The present study is based on the cost-benefit analysis approach, through which some analysis scenarios have been built and whose results are contrasted with the official project evaluations. The present research has focused on the analysis of the TIMT as a microcosm of the scarce efficiency of public investment in Mexico, resulting in a waste of social resources. According to the results of the study, the combination of delays and cost overruns (186% in nominal terms, 114% in real terms, and 90% in dollars) has configured a project (across two Federal Government Administrations) with negative social profitability, with losses valued at more than 550 million dollars, placing it in the most problematic quartile of train projects in the world.

Public investment as a growth driver for a commodity-exporting economy: Sizing up the fiscal-monetary involvement

<abstract> <p>The study presents a solution to maximize public investment as a growth driver for commodity-exporting economies. The solution is to compensate for the low efficiency of public investment by drawing on internal and external factors within an active fiscal and monetary policy framework. For this, the paper introduces a quantitative model that implements a golden rule of public finance in a resource boom backed by a sovereign wealth fund under an active monetary policy stance. The modeling results show that mobilizing windfall resource revenues to finance increased public investment can limit a crowding-out effect through proper resource allocation and change the sectoral structure in favor of the final goods sector. As confirmed by the sensitivity analysis, the low efficiency of public investment can be partially offset by a less restrictive monetary policy response to fiscal dominance, but this leads to excessive volatility in financial indicators. However, if the public debt burden is an issue due to a more robust fiscal dominance regime, a higher tax rate on exported raw materials can be used to maintain sustainability. By developing a policy goals domain, the paper initiates a discussion that can direct policy recommendations toward a promising growth path by maximizing the public investment driver in the complex policy environment of fiscal-monetary interaction.</p> </abstract>

ФАКТОРЫ И МЕХАНИЗМЫ ПОВЫШЕНИЯ ЭФФЕКТИВНОСТИ ИНВЕСТИЦИЙ ГОСУДАРСТВА В АГРОПРОМЫШЛЕННЫЙ КОМПЛЕКС РЕГИОНА (НА ПРИМЕРЕ РЕСПУБЛИКИ ТАТАРСТАН)

The transformation of the domestic agro-industrial complex to sustainable functioning is impossible without increased government support. Available experience and theoretical studies indicate that agriculture is particularly sensitive to the negative impacts of various external factors. In this context, it becomes important to strengthen the role of public administration in stimulating the development of the agricultural sector. The main task of state agricultural policy is the formation of a competitive agro-industrial complex that ensures food security and expands the export of agricultural products. However, recent measures taken in the regions of Russia to regulate the agricultural sector often turn out to be disjointed and ineffective. This situation emphasizes the need for in-depth research to improve the efficiency of public investment in the agro-industrial complex and develop a regional agri-food policy that will correspond to modern economic conditions and effectively influence the development of the agricultural sector in the region. The object of research is the agro-industrial complex of the Republic of Tatarstan. The purpose of the study is to determine the most significant factors and mechanisms aimed at increasing the efficiency of state investments in the agro-industrial complex of the Republic of Tatarstan. Research methods – analysis and synthesis, research of economic and legal documents, abstract-logical, statistical. The scientific novelty of the research is the characteristics of current strategic measures of investment support for the agro-industrial complex of the Republic of Tatarstan from the state, the formulation of factors and mechanisms aimed at increasing the efficiency of the implementation of these measures.

Multiplication effects of investment in a publicly significant infrastructure project

The article features results of the assessment of the multiplier effects for the national economy from the implementation of construction project of the first stage of production facility of the Dniester HPP for the period 2010-2019. For this purpose, macroeconomic statistics were processes, on whose basis an information system of primary and calculated indicators was created using the data from the project documentation, which became the basis for calculations. A methodological approach was developed to assess multiplier effects at the macroeconomic level using the input-output balance, which is reflected in the symmetrical "input-output" table. The authors highlight the main indicators, through which the impact of the implementation of the construction project of the Dniester HPP on Ukraine’s economy is manifested, and which allow assessing its socio-economic significance: the multiplier of the output growth of the economic activity "Construction" at the expense of project investments, the GVA multiplier for all economic activities from project investments, and the GDP multiplier (public expenditure multiplier). According to the implemented approach, multiplier effects for the economy are calculated via additional output growth, additional value added growth, and GDP growth on project investments. Based on the obtained results, it is proved that: 1) the implementation of the construction project of the first stage of the production facility of the Dniester HPP had made it possible to accumulate a multiplier effect for Ukraine’s economy, confirming in practice the theory of multiplier effects and proving the efficiency of public capital investments; 2) to the greatest extent, the multiplier effect from the additional investment growth in this project is generated within the economic activity "Construction", which is explained by increased demand for domestically produced construction products.

DECISION SUPPORT SYSTEM OF PAVEMENT SELECTION IN EMERGING ECONOMIES

Choosing rigid or flexible pavement is an important decision in infrastructure development projects and can improve public investment efficiency. Various studies have been conducted over the past few decades to compare between rigid and flexible pavement. Studies indicate that rigid pavement can have longer service life and require less maintenance costs, while others indicate that flexible pavement can have lower initial investment costs. Previous discussion tended to favor rigid pavement through the lens of its life cycle cost. Regardless, no consensus is established since life cycle costs can greatly vary from different project site conditions (e.g., soil conditions), discount rate, and requirements (i.e., costs and frequency) of maintenance and repair of different transportation agencies. Few studies discuss the practical decision-making processes to choose between the pavement types. This study developed a web-based decision support system to design alternative pavements and compare their life-cycle costs under various project conditions and requirements. The system’s functions are demonstrated using two example calculations based on Vietnamese design standards, and subsequent validation has demonstrated its capability in supporting decision-making in roadway pavement. This paper contributes to the body of knowledge by demonstrating a possible decision support system to improve public investment efficiency in selecting appropriate rigid or flexible pavement design.

DECISION SUPPORT SYSTEM OF PAVEMENT SELECTION IN EMERGING ECONOMIES

Choosing rigid or flexible pavement is an important decision in infrastructure development projects and can improve public investment efficiency. Various studies have been conducted over the past few decades to compare between rigid and flexible pavement. Studies indicate that rigid pavement can have longer service life and require less maintenance costs, while others indicate that flexible pavement can have lower initial investment costs. Previous discussion tended to favor rigid pavement through the lens of its life cycle cost. Regardless, no consensus is established since life cycle costs can greatly vary from different project site conditions (e.g., soil conditions), discount rate, and requirements (i.e., costs and frequency) of maintenance and repair of different transportation agencies. Few studies discuss the practical decision-making processes to choose between the pavement types. This study developed a web-based decision support system to design alternative pavements and compare their life-cycle costs under various project conditions and requirements. The system’s functions are demonstrated using two example calculations based on Vietnamese design standards, and subsequent validation has demonstrated its capability in supporting decision-making in roadway pavement. This paper contributes to the body of knowledge by demonstrating a possible decision support system to improve public investment efficiency in selecting appropriate rigid or flexible pavement design.

The Efficiency of Rural Public Finance Inputs in Promoting Rural Revitalization: Empirical Analysis Based on Henan Province, China

<p>The No.1 document of the Central Government of China has been on the theme of "agriculture, rural areas and farmers" for nearly ten years, placing the solution of "agriculture, rural areas and farmers" at the forefront of the Chinese government's work. Located in the Central Plains, Henan Province in China is one of the major agricultural provinces in China and plays an extremely important role in the field of agricultural production in China. This paper uses an empirical approach and the DEA-Malquist model to study the efficiency of rural public financial inputs to rural revitalisation in Henan Province. The results show that due to different levels of regional economic development, the efficiency of rural public finance investment in Henan Province in promoting rural revitalisation varies, and there is a phenomenon of unreasonable allocation of funds. At the same time, the region's agricultural base also has a greater impact on the efficiency of financial investment. Therefore, Henan Province should adjust measures according to the different regional economic levels and agricultural bases to improve the efficiency of the use of fiscal funds.</p>

Efficiency of Public Investments in Education and Economic Growth in the CEMAC

Efficiency of Public Investments in Education and Economic Growth in the CEMAC

Мультиплікаційні ефекти від інвестування в суспільно значущий інфраструктурний проєкт

The article features results of the assessment of the multiplier effects for the national economy from the implementation of construction project of the first stage of production facility of the Dniester HPP for the period 2010-2019. For this purpose, macroeconomic statistics were processes, on whose basis an information system of primary and calculated indicators was created using the data from the project documentation, which became the basis for calculations. A methodological approach was developed to assess multiplier effects at the macroeconomic level using the input-output balance, which is reflected in the symmetrical "input-output" table. The authors highlight the main indicators, through which the impact of the implementation of the construction project of the Dniester HPP on Ukraine’s economy is manifested, and which allow assessing its socio-economic significance: the multiplier of the output growth of the economic activity "Construction" at the expense of project investments, the GVA multiplier for all economic activities from project investments, and the GDP multiplier (public expenditure multiplier). According to the implemented approach, multiplier effects for the economy are calculated via additional output growth, additional value added growth, and GDP growth on project investments. Based on the obtained results, it is proved that: 1) the implementation of the construction project of the first stage of the production facility of the Dniester HPP had made it possible to accumulate a multiplier effect for Ukraine’s economy, confirming in practice the theory of multiplier effects and proving the efficiency of public capital investments; 2) to the greatest extent, the multiplier effect from the additional investment growth in this project is generated within the economic activity "Construction", which is explained by increased demand for domestically produced construction products.

Ukraine in the context of implementing the OECD recommendation on effective public investment across levels of government

The article examines the implementation of the Organization for Economic Cooperation and Development (OECD) Recommendation on Effective Public Investment Across Levels of Government in Ukraine. The article covers the nature and peculiarities of the OECD Recommendation and analyzes the process of its implementation by Ukraine. The purpose of the Recommendation on Effective Public Investment Across Levels of Government is to help governments at all levels assess the strengths and weaknesses of their public investment capacity using a country-wide approach and identify priorities for improvement. Given the downward trend in public investment, especially in times of crisis, it is very important for governments at all levels to be efficient, i.e., to be able to deliver better results with less costs and to spend more wisely. The problem is much broader than just funding investment, as it concerns the most efficient use of investment funds, for which different levels of government may lack appropriate management tools even if investment funding is available. The scope of the Organization for Economic Cooperation and Development and the list of legal instruments it is developing are described. The article outlines three systematic challenges to multi-level public investment management that impede the achievement of the best outcomes: coordination challenges, capacity challenges, and framework challenges. It notes that to address these issues, the OECD has developed a Recommendation on Effective Public Investment Across Levels of Government, which takes into account the above challenges and is built on three key pillars: coordination of public investment at different levels of government and policy; strengthening public investment capacity and promoting policy learning at all levels of government; and ensuring an appropriate framework for public investment at all levels of government. The framework covers twelve principles, which in turn include specific steps for implementing the OECD Recommendation in practice. The principles set out in the Recommendation are applicable to national, regional, and local governments and address aspects that are relevant to other stakeholders in public investment. The implementation of the OECD Recommendation on Effective Public Investment Across Levels of Government will allow Ukraine to benefit from the experience of successful OECD countries in this area, and the increase in the efficiency of public investment will signal to foreign investors that investing in Ukraine is a viable option. The article also examines the steps taken by Ukraine on the way to establishing and strengthening cooperation with the Organization for Economic Cooperation and Development, in particular in terms of implementing the Recommendation, and outlines the main problematic issues on this path. Ukraine’s cooperation with the Organization for Economic Cooperation and Development is extremely important for ensuring its economic well-being, both at the national, regional, and local levels.

IMPLEMENTATION OF THE “GOLDEN RULE” IN THE FISCAL MECHANISM FOR REGULATING INVESTMENT PROCESSES IN UKRAINE

Introduction. After the global financial and economic crisis, which led to the deterioration of fiscal stability, the growth of the budget deficit and public debt in many countries, ensuring the quality and long-term sustainability of public finances is one of the priority areas of fiscal policy. In this context, the implementation of the “golden rule” becomes especially relevant. Such a rule makes it possible to release state investments from the corresponding target indicators of the budget deficit. Accordingly, fiscal policy is being modernized, which will provide more opportunities for budgetary maneuvering and public investment. The purpose of the article is to reveal the content, advantages and disadvantages, as well as the peculiarities of the implementation of the “golden rule” in the fiscal mechanism for regulating investment processes in Ukraine. Results. It was found that the “golden rule” provides for public borrowing only for the purpose of investing in projects that will pay off in the future, as well as financing current budget expenditures at the expense of taxation. The advantages and disadvantages of the implementation of the “golden rule” in the fiscal mechanism for regulating investment processes are determined. Modified versions of the “golden rule” are considered: the “limited golden rule” proposed by the European Fiscal Council and the “asymmetric golden rule” substantiated by scientists. The ways of introducing the “golden rule” into domestic fiscal practice are outlined. Conclusions. The need to implement the “golden rule” into the fiscal mechanism for regulating investment processes in Ukraine is clarified. The creation of the Agency for State Investment Management in the context of the “golden rule” is substantiated. It is proposed to apply a more flexible approach to the formation of the budget deficit in the transitional post-war period before the full implementation of the “golden rule” in Ukraine. It is advisable to direct further scientific research to the search for alternative options for increasing the efficiency of public investments under the conditions of compliance with fiscal stability.

Completing the planning and implementation of plans of public investment in road infrastructure construction in Vietnam

In recent years, public investment has been crucial in promoting socioeconomic development. In the context of Vietnam's economic recession and difficulties due to the impact of the Covid-19 pandemic, public investment in road transport infrastructure construction has become an effective tool for macroeconomic management. Planning and implementation of plans have an essential function in ensuring investment efficiency. The article analyzed the current situation of public investment planning and implementation in road infrastructure construction, pointed out the shortcomings, and established 19 criteria to evaluate the planning function and organization of plan implementation. Also, in the article, quantitative analysis is performed through SPSS software to determine the level of achievement of the targets. That is the basis for the authors to propose some solutions to improve the planning and implementation of plans to enhance the efficiency of public investment in road infrastructure construction in Vietnam.

Dominance score in the fiscal-monetary interaction

<abstract> <p>The paper addresses a trade-off between the degree of fiscal dominance and fiscal and monetary sustainability conditions. The research aims at finding growth incentives in the complex fiscal-monetary environment. By testing the actual data, the study introduces the empirical specification of the non-linear relationship between the dynamics of broad money and public debt, which allows for interpolating the fiscal space. The study develops a Dynamic Stochastic General Equilibrium (DSGE) model for a small open developing economy that, in addition to several rigidities, such as deep habit formation, staggered pricing and wage stickiness, also incorporates the extended fiscal and monetary policy blocks, a composite lifetime utility-generating function, a low level of public investment efficiency and a negative relationship between the interest rate premium and foreign prices fluctuation. Employing the developed DSGE framework made it possible to outline a promising growth path in the policy trade-off between the degree of fiscal dominance and the persistence of sustainability conditions. The modeling results revealed that short-term growth outweighs the crowding-out effect and that excessive macroeconomic volatility, especially price and debt dynamics, is well-curbed. The calculation of elasticity functions allowed for calibrating the interrelationship between the maximum growth rate of output, the degree of fiscal dominance and the persistence of fiscal and monetary sustainability conditions. The study highlights two key messages. The public debt ratio is not the final indicator to determine fiscal sustainability conditions. The degree of dominance, not the ratio of public debt to output, matters most that fiscal and monetary authorities should consider in pursuing growth incentive policy.</p> </abstract>

Public investment efficiency in WAEMU zone: do financing sources matter?

PurposeThis paper aims to assess the efficiency of public investment in West African Economic and Monetary Union (WAEMU) countries at both the global and sectoral level over the 2005–2015 period.Design/methodology/approachThis paper estimates efficiency scores using stochastic frontier analysis (SFA) models. Efficiency is divided into managerial efficiency (related to inputs management) and technological efficiency (related to production technology). A Tobit model is then used to investigate the determinants of public investment efficiency.FindingsThe findings suggest that, at the global level, WAEMU countries are less efficient than sub-Saharan African and Asian reference countries. However, the breakdown of global efficiency into managerial and technological reveals that WAEMU countries are more efficient than sub-Saharan African countries in terms of technological efficiency. Moreover, these findings are robust to nonparametric estimation. The assessment of financing sources indicates that external debt has a more positive and significant effect on public investment efficiency than internal debt does.Originality/valueThis paper is unique in that it disentangles managerial efficiency from the technological efficiency of public investment in WEAMU countries and highlights how financing sources of investment affect its efficiency. In terms of policy implications, the underlying message of the results is that the rules and conditions of domestic or regional debt in the WAEMU countries must be strengthened to ensure better monitoring and then better efficiency of these resources.

The Effect of Public and Private Sector Fixed Capital Investments on Gross Domestic Product and Employment in Turkey

Purpose: The aim of this study is to analyze the effects of public and private sector investments on gross domestic product (GDP) and employment econometrically with the panel data method in order to determine the efficiency of investments in Turkey.
 Design/Method/Approach: In the study, the possible effects of public and private sector investments on GDP and employment in Turkey are examined by dividing them into sectors. Sectors are included in the analysis as agriculture and other non-agricultural sectors. Since the data of various sectors within a certain time period are used, time series and horizontal cross-sectional data are analyzed using the panel data method, which allows them to be used together. Four different models are created in the research. Among them, the effects of public investment expenditures on GDP in the period of 2004-2020 in Model 1, private investment expenditures on GDP in the same period in Model 2, public investment expenditures on employment in the period of 2014-2021 in Model 3 and private investment expenditures on employment data in Model 4 are investigated.
 Findings: The results obtained from the analyses show that public and private sector investments have a significant and positive impact on GDP and employment in Turkey.
 Practical Implications: It is generally accepted in the public finance literature that investments will positively affect economic growth, production level, employment and regional development if they are used in productive areas.
 Originality/Value: What makes this study different from others is that the relationship of public and private sector investments with both GDP and employment is analyzed separately. In this way, a comparison can be made from the point of public and private sector investments in Turkey in terms of the contribution of investments to both GDP and employment, and an answer can be sought to the question of how correct the policy of increasing the share of the private sector in investments, especially in recent years, is in Turkey.
 Research Limitations/Future Research: This study will make a significant contribution to the literature on the economic effects of public and private sector investments. It will be determined how accurate the idea of increasing the share of private investments in Turkey in recent years is. According to the results obtained from the study, new studies will be conducted on what can be done to increase the efficiency of public or private sector investments.
 Disclaimer: This article was produced from the doctoral thesis prepared by Özgür Mustafa Ömür at Bursa Uludağ University Social Sciences Institute, Department of Finance, under the supervision of Prof. Dr. Filiz Giray.
 Paper Type: Empirical
 JEL Classification: E01, E22, E24, H54

Public attention and investment efficiency: Incentive effect or deterrent effect? Analysis on heterogeneous bilateral stochastic frontier model

Based on the attention theory and agent theory, the research expands the research on the influencing factors of the company's investment behavior and further analyzes the causes of investment behavior from the perspective of public concern. This study uses the data on Chinese listed companies for the first time to empirically analyze the influence of public attention on enterprise investment behavior and its mechanism, which fills the gap of the lack of research in related fields and provides an important supplement to the research on the relationship between management heterogeneity and investment behavior. Considering that there may be endogenous problems in the model, this study further uses identification strategies, such as executive transition analysis and panel tool variable estimation, and all the results show that public attention can significantly improve the investment level of enterprises. Finally, this study uses media attention based on the Baidu search index and quantitative indicators of financial news from newspapers to conduct a series of robustness tests further to prove the robustness and reliability of the regression models. It is found that public attention has a significant positive effect on investment efficiency, strategy formulation, and internal control of enterprises and has a certain deterrent effect that has a more obvious positive effect on the investment efficiency of large enterprises. Public attention has promoted the investment efficiency of enterprises and had a certain incentive effect through governance mechanisms such as the overseas experience of executives, consistent design of management interests, and mitigation of short-sightedness of the management. In the process of enterprise management and operation, we should correctly treat the influence of public concern and attach importance to the structure configuration of management.

Justifi cation of economic effi ciency of state investments in capital construction facilities

Modern investment and construction activities in the Russian Federation in the current paradigm of providing a comfortable environment for human life should provide continuous creation (improvement) of the infrastructure of the territory. Every year, at the state level, investment programs are created, refl ecting the priority areas of construction and financed from the state budget. But the problems existing because of worsening of the quality of the construction production, not always high level of qualification of executors and necessary construction and investment control on all stages of life cycle of the object of capital construction have led to necessity to create the system that stipulates setting limits of budget obligations to cover existing risks and fulfill investment project in due time. To solve the stated problem, the subject area of the study is defined. The subject of the research: the process of formation of the cost of the object of capital construction. The aim of the research: creation of the mechanism for determining the economic effi ciency of public investments, depending on the emerging risks in the process of implementation of the object of capital construction throughout the life cycle. Research objectives: to develop a methodical approach to justify the basic principles and concepts associated with the system of formation of budget limit and reserves of funds for contingencies and costs in determining the cost of construction; to develop proposals for improving Russian legislation. Research methods: analysis and synthesis, graphic modeling, comparative estimates. Research results: a mechanism for determining the economic effi ciency of public investments depending on the coeffi cient of budgetary obligation limits, taking into account the size of the reserve funds for contingency work and costs at the stages of the life cycle of the object of capital construction when implementing the investment project. Scope of application of the results: the introduction of the mechanism for determining the economic efficiency of public investment in the activities of the Ministry of Construction, Housing and Communal Services of the Russian Federation, at the territorial level — in the activities of the executive authorities to plan and provide investment programs.

Rural Tourism Public Service Performance Evaluation Based on Analytic Hierarchy Process

In recent years, more and more attention has been paid to the construction of rural tourism, and tourists’ demand for rural tourism public services has become stronger and stronger. Through the objective and fair evaluation of rural tourism public service performance, on the one hand, it is helpful to improve the overall satisfaction of tourists to rural tourism. On the other hand, it can also ensure the efficiency of public service financial investment and expenditure. Firstly, on the basis of theoretical summary and hierarchical analysis, this paper constructs the performance evaluation index system of rural tourism public service from five aspects of infrastructure services, public transport services, public information services, security services, and public environmental services. Then taking China as an example, the performance of rural tourism public service is evaluated by analytic hierarchy process. The results show that the construction of hard environment such as public transport services, security services, and infrastructure services is a key factor in the construction of rural tourism public services. Finally, according to the evaluation results obtained in this paper, some suggestions are put forward for the development of rural tourism and the improvement of public service quality in the future.