Making the Most of Public Investment in MENA and CCA Oil-Exporting Countries

By Maria A Albino-War, Svetlana Cerovic, Francesco Grigoli, Juan C Flores, Javier Kapsoli, Haonan Qu, Yahia Said, Bahrom Shukurov, Martin Sommer, SeokHyun Yoon

November 12, 2014

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Maria A Albino-War, Svetlana Cerovic, Francesco Grigoli, Juan C Flores, Javier Kapsoli, Haonan Qu, Yahia Said, Bahrom Shukurov, Martin Sommer, and SeokHyun Yoon. Making the Most of Public Investment in MENA and CCA Oil-Exporting Countries, (USA: International Monetary Fund, 2014) accessed December 26, 2024

Also available in: العربية

Disclaimer: This Staff Discussion Note represents the views of the authors and does not necessarily represent IMF views or IMF policy. The views expressed herein should be attributed to the authors and not to the IMF, its Executive Board, or its management. Staff Discussion Notes are published to elicit comments and to further debate.

Summary

Over the past decade, rising oil prices have translated into high levels of public investment in most MENA and CCA oil exporters. This has prompted questions about the efficiency of public investment in generating growth and closing infrastructure gaps, as well as concerns about fiscal vulnerabilities. When public investment is inefficient, higher levels of spending may simply lead to larger budget deficits, without sufficiency increasing the quantity or quality of public infrastructure in support of economic growth. This paper examines the efficiency of public investment in the MENA and CCA oil exporters using several techniques, including a novel application of the efficiency frontier analysis, estimates of unit investment costs, and assessments of public investment processes. The analysis confirms that these oil exporters have substantial room to improve public investment efficiency. Reforms in the public financial and investment management systems are needed to achieve this objective.

Subject: Capital spending, Environment, Expenditure, Infrastructure, National accounts, Natural resources, Public investment and public-private partnerships (PPP), Public investment spending

Keywords: Capital spending, Diminishing returns on investment, Efficiency, Global, Infrastructure, Investment, Investment decision, Investment efficiency, Investment project, Management Index, MCDOEs, Natural resources, Oil exporters, Public investment, Public investment and public-private partnerships (PPP), Public investment efficiency, Public investment spending, Resource wealth management, SDN, Unit investment cost

Publication Details

Pages:

33
Volume:

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DOI:

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Issue:

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Series:

Staff Discussion Notes No. 2014/010
Stock No:

SDNEA201410
ISBN:

9781498311397
ISSN:

2617-6750

Notes

Executive summary also available in Arabic.

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