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The impact of infrastructure spending in Sub-Saharan Africa : a CGE modeling approach (Inglês)

The authors constructed a standard computable general equilibrium (CGE) model to explore the economic impact of increased spending on infrastructure in six African countries: Benin, Cameroon, Mali, Senegal, Tanzania, and Uganda. The basic elements of the model are drawn from EXTER, adjusted to accommodate infrastructure externalities. Seven sectors were considered: food crop agriculture, export agriculture, mining and oil, manufacturing, construction, private services, and public services. Four sets of simulations were conducted: baseline nonproductive investments, roads, electricity, and telecoms. For each set of simulations, five funding schemes were considered: reduced public expenditure; increased value-added taxes; increased import duties; funding from foreign aid; and increased income taxes. In general, the funding schemes had similar qualitative and quantitative effects on macro variables. For road and electricity investment, there were relatively large quantitative differences and some qualitative differences among funding schemes at the macro level. Sectoral analysis revealed further disparities among countries and investment types. The same type of investment with the same funding sources had varying effects depending on the economic structure of the sector in question. The authors find that few sectors are purely tradable or non-tradable, having instead variable degrees of openness to trade. If the current account needs to be balanced, funding investment through foreign aid produces the strongest sectoral effects because strong price and nominal exchange rate adjustments are needed to clear the current account balance. In addition, the capital/labor ratio of each sector plays an important role in determining its winners and losers.

Detalhes

  • Autor

    Estache,Antonio, Perrault, Jean-François, Savard,Luc

  • Data do documento

    2010/07/01

  • TIpo de documento

    Documento de trabalho sobre pesquisa de políticas

  • No. do relatório

    WPS5386

  • Nº do volume

    1

  • Total Volume(s)

    1

  • País

    África,

  • Região

    África,

  • Data de divulgação

    2010/07/28

  • Disclosure Status

    Disclosed

  • Nome do documento

    The impact of infrastructure spending in Sub-Saharan Africa : a CGE modeling approach

  • Palavras-chave

    nominal exchange rate;export agriculture;operation and maintenance cost;increase in government income;demand for investment good;public investment in infrastructure;level of government expenditure;import duty;public expenditure;current account balance;real exchange rate;elasticity of substitution;productive investment;Type of Investment;investment in electricity;social accounting matrix;value added tax;government budget constraint;source income;source of income;public infrastructure investment;total factor productivity;share of export;total private investment;investments in infrastructure;Computable General Equilibrium;income after tax;exchange rate adjustment;performance of private;increase in expenditure;investment in road;ratio of imports;high import duties;classification of sectors;global knowledge base;representative household income;comparative analysis;equivalent variation;construction sector;road investment;crop agriculture;import good;baseline scenario;government saving;industrial sector;investment fund;productive sector;gas service;relative price;sectoral results;price index;macroeconomic result;output ratio;agricultural sector;production externality;road infrastructure;export sector;impact analysis;capital payment;local consumer;Labor Market;closure rule;borrowing rate;oil sector;funding source;tradable sector;capital ratio;factor market;negative effect;market price;Investment strategies;fund investment;funding mechanism;productive infrastructure;electricity infrastructure;economic sector;dutch disease;local good;fixed share;high elasticity;substitution effect;food crop;sectoral analysis;Fiscal policies;production tax;investment demand;positive externality;intermediate consumption;fiscal policy;investment objective;tax rate;infrastructure spending;government revenue;macro level;electricity investment;Mining;negative value;increased demand;common feature;high wage;business faculty;world market;Industrial Goods;price effect;behavioral effect;labor-intensive sectors;wage hike;productive factor;labor ratio;government pay;increased spending;wage increase;investment option;empirical study;big winner;positive impact;total output;agricultural product;infrastructure expenditure;foreign donor;industrial production;private saving;investment scenario;macroeconomic variable;Investment Type;increased income;education investment;equilibrium condition;gdp deflator;domestic consumer;fixed value;nominal wage;Fiscal Sustainability;production function;high spending;policy shock;commodity market;labor supply;sensitivity analysis;world price;import demand;comparative advantage;behavioral assumptions;export crop;subsistence agriculture;capital demand;fiscally sustainable;import sector;local market;government subsidy;countries firms;funding requirements;government investment;government spending;uniform tax;operational expenditure;downward pressure;rental rate;Public Goods;factor allocation;factor payment;total consumption;capital remuneration;export structure;welfare change;budgetary impact;policy simulation;budgetary assistance;behavioral parameters;income equation;fiscal structure;labor demand;demand function;utility function;financing option;capital account;household consumption;intermediate input;productivity effect;total productivity;internal tax;government consumption;government fiscal;increased investment;aggregate model;investment need;methodological approach;capital-intensive sector;annual investment;labor-intensive industry;slight reduction;investment expenditure;agricultural price;national account;infrastructure financing;

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