Infrastructure privatization in a neoclassical economy: macroeconomic impact and welfare computation

In this paper a competi tive general equilibrium model is used to investigate the welfare and long run allocation impacts of privatization. There are two types of capital in this model economy, one private and the other initially public ("infrastructure"), and a positive extemality due to the latter is assumed. A benevolent governrnent can improve upon decentralized allocation intemalizing the extemality, but it introduces distortions in the economy through the finance of its investments. It is shown that even making the best case for public action - maximization of individuais' welfare, no operation inefficiency and free supply to society of infrastructure services - privatization is welfare improving for a large set of economies. Hence, arguments against privatization based solely on under-investment are incorrect, as this maybe the optimal action when the financing of public investment are considered. When operation inefficiency is introduced in the public sector, gains from privatization are much higher and positive for most reasonable combinations of parameters.

Welfare and growth effects of alternative fiscal rules for infrastructure investment in Brazil

This article studies the interplay between fiscal rules, public investment and growth in Brazil. It is investigated if it would make sense to raise public investment and, if so, under which fiscal rule it is best to do it — whether through tax financing, debt financing, or a reduction of public consumption. We construct and simulate a competitive general equilibrium model, calibrated to Brazilian economy, in which public capital is a component of the production function and public consumption directly affects individuals’ well-being. After assessing the impacts of alternative fiscal rules, the paper concludes that the most desirable financing scheme is the reduction of public consumption, which dominates the others in terms of output and welfare gains. The model replicates the observed growth slowdown of the Brazilian economy when we increase taxes and reduce public capital formation to the levels observed after 1980 and shows that the growth impact of the expansion of tax collection in Brazil was much larger than that of public investment compression.

Multilateral banking and development financing in a context of financial volatility

Includes bibliography

Project Financing nelle Infrastrutture del Trasporto

L’elaborato ha avuto ad oggetto l’analisi delle sofisticate soluzioni normative proposte dall’ordinamento nazionale in relazione all’evoluzione della finanza di progetto. In particolare, è stata condotto un dettagliato studio delle fasi che compongono il project financing, nonché dei soggetti che, a diverso titolo e ragione, vi partecipano. L’elaborato contiene, poi, recenti esempi concreti di project financing nelle infrastrutture primarie (autostrade) tra cui il progetto di costruzione e la successiva gestione dell’autostrada regionale Medio Padana veneta, dell’autostrada regionale Cispadana, e dell’autostrada “Nogara-mare”. L’ultimo parte della tesi è stata infine incentrata sull’analisi delle più recenti pronunce giurisprudenziali in materia di project financing. In particolare, si ha avuto modo di analizzare il fenomeno dello jus poenitendi dell’amministrazione aggiudicatrice, nonché, più in generale gli eventi che possono negativamente incidere sulla finanza di progetto (mancata aggiudicazione, risoluzione del contratto di gestione, ecc.).

Financing Small and Medium Enterprises in Myanmar

Small and medium enterprises (SMEs) share the biggest part in Myanmar economy in terms of number, contribution to employment, output, and investment. Myanmar economic growth is thus totally dependent on the development of SMEs in the private sector. Today, the role of SMEs has become more vital in strengthening national competitive advantage and the speedy economic integration into the ASEAN region. However, studies show that SMEs have to deal with a number of constraints that hinder their development potential, such as the shortage in power supply, unavailability of long-term credit from external sources and many others. Among them, the financing problem of SMEs is one of the biggest constraints. Such is deeply rooted in demand and supply issues, macroeconomic fundamentals, and lending infrastructure of the country. The government’s policy towards SMEs could also lead to insufficient support for the SMEs. Thus, focusing on SMEs and private sector development as a viable strategy for industrialization and economic development of the country is a fundamental requirement for SME development. This paper recommends policies for stabilizing macro economic fundamentals, improving lending infrastructures of the country and improving demand- and supply-side conditions from the SMEs financing perspective in order to provide a more accessible financing for SMEs and to contribute in the overall development of SMEs in Myanmar thereby to sharpen national competitive advantage in the age of speedy economic integration.

Comparative analysis of road financing approaches in Europe and the United States

Road infrastructure has a remarkable economic and social impact on society. This is why road financing has always drawn the attention of policymakers, especially when resources available for government spending become scarce. Nations exhibit differing approaches to dealing with road transportation financing. In the United States, the current system of road funding has been called into question because some regard it as insufficient to meet the amounts now required for road expenditures. By contrast, in most European countries, road charges are very high, but these revenues are not allocated for the funding of roads. This paper analyzes the balance between charging for the use of and expenditure on the road sector in the United States and compares the American policy with those of several European countries (Germany, United Kingdom, France, Spain, and Switzerland). To that end, a methodology is defined to calculate the annual amount of fee charges levied on light and heavy vehicles in the selected countries in order to compare those charges with annual road expenditures. The results show that road charges in America are noticeably lower than those paid in Europe. Additionally, the research concludes that in Europe, road-generated revenues exceed road expenditures in all the countries studied, so road charges actually subsidize other policies. By contrast, in the United States, the public sector subsidizes the road system in order to maintain the current level of expenditure.

Delivering the goods : public works technologies, management, and financing : summary.

"OTA-SET-478"--P. [4] of cover.

Water Pollution Control Loan Program : low interest wastewater treatment financing.

Description based on: 2000 edition.

Financial liberalization and dynamics of firm-level financing and investment decisions in the Southeast Asian countries

This thesis examines the dynamics of firm-level financing and investment decisions for six Southeast Asian countries. The study provides empirical evidence on the impacts of changes in the firm-level financing decisions during the period of financial liberalization by considering the debt and equity financing decisions of a set of non-financial firms. The empirical results show that firms in Indonesia, Pakistan, and South Korea have relatively faster speed of adjustment than other Southeast Asian countries to attain optimal debt and equity ratios in response to banking sector and stock market liberalization. In addition, contrary to widely held belief that firms adjust their financial ratios to industry levels, the results indicate that industry factors do not significantly impact on the speed of capital structure adjustments. This study also shows that non-linear estimation methods are more appropriate than linear estimation methods for capturing changes in capital structure. The empirical results also show that international stock market integration of these countries has significantly reduced the equity risk premium as well as the firm-level cost of equity capital. Thus stock market liberalization is associated with a decrease in the cost of equity capital of the firms. Developments in the securities markets infrastructure have also reduced the cost of equity capital. However, with increased integration there is the possibility of capital outflows from the emerging markets, which might reverse the pattern of decrease in cost of capital in these markets.

THE DEVELOPMENT EFFECTIVENESS OF INTERNATIONAL WATER AND SANITATION INFRASTRUCTURE PROJECTS: DEFINING “QUALITY AT ENTRY” OF WORLD BANK PROJECTS.

Over the past 15 years, the number of international development projects aimed at combating global poverty has increased significantly. Within the water and sanitation sector however, and despite heightened global attention and an increase in the number of infrastructure projects, over 800 million people remain without access to appropriate water and sanitation facilities. The majority of donor aid in the water supply and sanitation sector of developing countries is delivered through standalone projects. The quality of projects at the design and preparation stage is a critical determinant in meeting project objectives. The quality of projects at early stage of design, widely referred to as quality at entry (QAE), however remains unquantified and largely subjective. This research argues that water and sanitation infrastructure projects in the developing world tend to be designed in the absence of a specific set of actions that ensure high QAE, and consequently have relatively high rates of failure. This research analyzes 32 cases of water and sanitation infrastructure projects implemented with partial or full World Bank financing globally from 2000 – 2010. The research uses categorical data analysis, regression analysis and descriptive analysis to examine perceived linkages between project QAE and project development outcomes and determines which upstream project design factors are likely to impact the QAE of international development projects in water supply and sanitation. The research proposes a number of specific design stage actions that can be incorporated into the formal review process of water and sanitation projects financed by the World Bank or other international development partners.