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Liberia is facing large infrastructure gaps and developmental needs that constrain the country’s growth potential. The government has set an ambitious agenda to transform the economy and to reach middle-income country status by 2030 by scaling up investment in infrastructure and human capital. Fiscal space remains constrained by rigidities in current spending and the government will need to resort to borrowing to close some of the gaps. This paper presents an estimate of the nexus between public investment, financing, and growth in Liberia using an inter-temporal macroeconomic model. The model has been calibrated as much as possible to Liberian economic data and assumes that public investment has a high economic and social rate of return and is highly complementary toward private sector investment. The objective of the paper is to contribute to the debate on how fast public investment should be scaled up to address the country’s developmental needs. The paper also highlights the trade-offs and potential risks associated with different financing options and the required changes in fiscal policy to ensure macroeconomic stability.

Economic development --- Development, Economic --- Economic growth --- Growth, Economic --- Economic policy --- Economics --- Statics and dynamics (Social sciences) --- Development economics --- Resource curse --- International Monetary Fund --- Internationaal monetair fonds --- International monetary fund --- Foreign Exchange --- Infrastructure --- Public Finance --- Fiscal Policy --- International Lending and Debt Problems --- Debt --- Debt Management --- Sovereign Debt --- Institutions and Growth --- National Government Expenditures and Related Policies: Infrastructures --- Other Public Investment and Capital Stock --- Investment --- Capital --- Intangible Capital --- Capacity --- Public finance & taxation --- Currency --- Foreign exchange --- Macroeconomics --- Public investment spending --- Public investment and public-private partnerships (PPP) --- Exchange rates --- Public debt --- Expenditure --- National accounts --- Public investments --- Public-private sector cooperation --- Debts, Public --- Saving and investment --- Liberia

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The quality and stock of infrastructure vary widely across countries of the Eastern Carribbean Currency Union and are inadequate to achieve the desired higher growth and social development. Given relatively low investment rates in the region, one solution is to invest more. However this paper shows that governments can also narrow their infrastructure and service gaps significantly by improving expenditure efficiency and strengthening public investment management systems.

Infrastructure --- Public Finance --- National Government Expenditures and Related Policies: Infrastructures --- Other Public Investment and Capital Stock --- Investment --- Capital --- Intangible Capital --- Capacity --- National Government Expenditures and Related Policies: General --- Public finance & taxation --- Macroeconomics --- Public investment and public-private partnerships (PPP) --- Public investment spending --- Expenditure --- Capital spending --- National accounts --- Saving and investment --- Public-private sector cooperation --- Public investments --- Expenditures, Public --- Capital investments --- Antigua and Barbuda

Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

The quality and stock of infrastructure vary widely across countries of the Eastern Carribbean Currency Union and are inadequate to achieve the desired higher growth and social development. Given relatively low investment rates in the region, one solution is to invest more. However this paper shows that governments can also narrow their infrastructure and service gaps significantly by improving expenditure efficiency and strengthening public investment management systems.

Antigua and Barbuda --- Infrastructure --- Public Finance --- National Government Expenditures and Related Policies: Infrastructures --- Other Public Investment and Capital Stock --- Investment --- Capital --- Intangible Capital --- Capacity --- National Government Expenditures and Related Policies: General --- Public finance & taxation --- Macroeconomics --- Public investment and public-private partnerships (PPP) --- Public investment spending --- Expenditure --- Capital spending --- National accounts --- Saving and investment --- Public-private sector cooperation --- Public investments --- Expenditures, Public --- Capital investments