How Important Is the Efficiency of Government Investment? The Case of the Republic of Congo

The Republic of Congo, an oil rich country in Central Africa, has made substantial progress in the past decade in stabilizing the economy and achieving high growth rates. However, despite reaching middle-income country status in 2006, the economy is not diversified, poverty remains pervasive, and social indicators are well below the average for countries with a similar income level. This paper analyzes aspects of an ambitious investment program on which the government has embarked to improve the provision of basic services and promote private sector development. The success of this program, however, is questionable given the low absorptive capacity of the country and in particular the poor efficiency of public investment management. The analysis is based on simulations with an economy-wide model for analysis of development strategies and government policies, MAMS (Maquette for MDG Simulations). The results of the simulations show that slightly delaying large investment projects, while simultaneously improving the efficiency of the investment program, would lead to significantly higher growth rates and lower poverty levels. The analysis therefore confirms the importance of efficient public investment management for the optimal use of the country's resources.

Bibliographic Details

Main Authors:	Nielsen, Hannah, Lofgren, Hans
Language:	English
Published:	2011-12-01
Subjects:	ACCOUNTING, AGRICULTURE, BALANCE OF PAYMENTS, BASE YEAR, BENCHMARK, BORROWING, BUDGET CONSTRAINT, BUDGET CONSTRAINTS, CAPITAL ACCOUNTS, CAPITAL STOCKS, CIRCULAR FLOW, COMMODITY PRICES, CONSUMERS, CURRENT ACCOUNT, CURRENT ACCOUNTS, DEBT, DEBT BURDEN, DEFICITS, DEMAND CURVES, DEVELOPING COUNTRIES, DEVELOPING COUNTRY, DEVELOPMENT ECONOMICS, DEVELOPMENT POLICY, DEVELOPMENT STRATEGIES, DIVERSIFICATION, DOMESTIC BORROWING, DOMESTIC MARKET, DOMESTIC MARKETS, ECONOMIC DEVELOPMENT, ECONOMIC PERFORMANCE, ECONOMIC POLICY, ECONOMIC REFORMS, EDUCATIONAL ATTAINMENTS, EDUCATIONAL LEVEL, EDUCATIONAL LEVELS, EMPLOYMENT GROWTH, ENROLLMENT, ENROLMENT RATE, ENROLMENT RATES, EXPENDITURE, EXPORTS, EXTERNAL BORROWING, EXTERNAL DEBT, FACTOR DEMAND, FACTOR MARKETS, FINANCIAL SUPPORT, FIXED INVESTMENT, FORECASTS, FOREIGN CURRENCY, FOREIGN DEBT, FOREIGN DIRECT INVESTMENT, FOREIGN EXCHANGE, FOREIGN INTEREST, FULL EMPLOYMENT, GDP, GDP PER CAPITA, GENERAL EQUILIBRIUM, GINI COEFFICIENT, GOVERNMENT BUDGET, GOVERNMENT DEBT, GOVERNMENT FINANCES, GOVERNMENT INVESTMENT, GOVERNMENT INVESTMENTS, GOVERNMENT POLICIES, GOVERNMENT REVENUES, GOVERNMENT SPENDING, GROWTH RATE, HIGH UNEMPLOYMENT, HOUSEHOLD WELFARE, HOUSEHOLDS, HUMAN DEVELOPMENT, HUMAN RESOURCE, INCOME, INCOME LEVEL, INFANT MORTALITY, INFLATION, INFRASTRUCTURE INVESTMENT, INFRASTRUCTURE INVESTMENTS, INTEREST PAYMENTS, INTERNAL RATE OF RETURN, INTERNATIONAL BANK, INVESTING, INVESTMENT FINANCING, INVESTMENT PLAN, INVESTMENT PROJECTS, INVESTMENT SPENDING, LABOR FORCE, LABOR FORCE PARTICIPATION, LABOR MARKET, LABOR MARKETS, MACROECONOMIC POLICIES, MORTALITY, OIL PRICE, OIL PRICES, OUTPUTS, PAYMENT FLOWS, PRICE CHANGE, PRICE CHANGES, PRICE LEVELS, PRICE VOLATILITY, PRIMARY SCHOOL ENROLMENT, PRIVATE CAPITAL, PRIVATE INVESTMENT, PRIVATE SAVINGS, PRODUCTIVITY, PRODUCTIVITY INCREASES, PROFIT MAXIMIZATION, PUBLIC DEBT, PUBLIC FINANCE, PUBLIC INVESTMENT, PUBLIC INVESTMENTS, PUBLIC SPENDING, REAL EXCHANGE RATE, REAL GDP, REAL WAGES, RECEIPTS, RECURRENT EXPENDITURE, RETURNS, SAFETY, SAVINGS, SOCIAL DEVELOPMENT, SOCIAL DEVELOPMENTS, STATISTICAL ANALYSIS, STOCK DATA, SUPPLIERS, SUPPLY CURVE, SUPPLY CURVES, TAXATION, TOTAL FACTOR PRODUCTIVITY, TOTAL REVENUE, TURNOVER, UNEMPLOYED, UNEMPLOYMENT, UNEMPLOYMENT LEVELS, UNEMPLOYMENT RATE, UNEMPLOYMENT RATES, URBAN AREAS, UTILITY MAXIMIZATION, WAGES, WEALTH,
Online Access:	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20111207113417 https://hdl.handle.net/10986/3668
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