Fiscal Policy as an Instrument of Investment and Growth

This paper investigates the role of fiscal guarantees in promoting infrastructure investment. Infrastructure is a critical driver of economic growth, but infrastructure entails significant up-front costs that yield benefits after a time lag. Invest...

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Main Author:	Basu, Kaushik
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2014
Subjects:	ADVERSE SELECTION BANK POLICY BANKRUPT BANKRUPTCY BINDING CONSTRAINT BOOST TO GROWTH BORROWING CAPITAL FORMATION CONTRACT ENFORCEMENT CREDIT DEFAULT CREDIT MARKET DEBT DEBT CRISIS DEBT RATIOS DEFICITS DELIVERY OF GOODS DEPENDENT DEVELOPMENT BANKS DISBURSEMENT EARNINGS ECONOMETRICS ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC POLICY ECONOMIC RECESSION ECONOMIC TRANSACTIONS ECONOMICS EMERGING ECONOMIES EMERGING MARKET EMERGING MARKET ECONOMIES EMERGING MARKETS ENTREPRENEUR ENTREPRENEURS EXPENDITURE FINANCIAL INSTITUTIONS FINANCIAL SECTOR FINANCIAL SECTOR REFORMS FISCAL DEFICITS FISCAL EXPENDITURE FISCAL POLICIES FISCAL POLICY FISCAL SUPPORT FOREIGN BANKS FOREIGN CAPITAL FOREIGN DIRECT INVESTMENT GLOBALIZATION GOOD GOVERNANCE GOVERNANCE SYSTEM GOVERNMENT FINANCE GOVERNMENT GUARANTEES GOVERNMENT INVESTMENT GROWTH RATE GUARANTEE AGENCIES GUARANTEE AGENCY INCOME INFLATION INFRASTRUCTURE INVESTMENT INFRASTRUCTURE PROJECT INFRASTRUCTURE PROJECTS INSTRUMENT INSURANCE INSURANCE SERVICE INTEREST RATE INTERNATIONAL BANK INTERNATIONAL INVESTOR INTERNATIONAL LENDING INTERNATIONAL STANDARD INVESTING INVESTMENT CLIMATE INVESTMENT PROJECTS INVESTMENT RATE JOINT LIABILITY JUDICIAL DECISIONS JUDICIARY LABOR FORCE LEGAL JURISDICTION LENDER LIMITED LIABILITY LIQUIDITY LOAN LONG-TERM INVESTMENT LOW-INCOME COUNTRIES MONETARY POLICY MORTGAGES MULTILATERAL FINANCIAL INSTITUTIONS NOMINAL INTEREST RATE OPPORTUNITY COST POLITICAL ECONOMY PRIVATE ENTREPRENEUR PRIVATE INFRASTRUCTURE PRIVATE INVESTMENT PRIVATE INVESTOR PRIVATE INVESTORS PROBABILITY OF DEFAULT PUBLIC INVESTMENT PUBLIC-PRIVATE PARTNERSHIP PUBLIC-PRIVATE PARTNERSHIPS RAPID GROWTH RECESSION REGULATORY REGIME RETURN RETURNS RISK OF DEFAULT SELF-FINANCE SOVEREIGN DEBT START-UP STATE GUARANTEE STATE GUARANTEES TREASURY TREATY WORLD DEVELOPMENT INDICATORS
Online Access:	http://documents.worldbank.org/curated/en/2014/05/19456271/fiscal-policy-instrument-investment-growth http://hdl.handle.net/10986/18348

id	okr-10986-18348
recordtype	oai_dc
spelling	okr-10986-183482021-04-23T14:03:44Z Fiscal Policy as an Instrument of Investment and Growth Basu, Kaushik ADVERSE SELECTION BANK POLICY BANKRUPT BANKRUPTCY BINDING CONSTRAINT BOOST TO GROWTH BORROWING CAPITAL FORMATION CONTRACT ENFORCEMENT CREDIT DEFAULT CREDIT MARKET DEBT DEBT CRISIS DEBT RATIOS DEFICITS DELIVERY OF GOODS DEPENDENT DEVELOPMENT BANKS DISBURSEMENT EARNINGS ECONOMETRICS ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC POLICY ECONOMIC RECESSION ECONOMIC TRANSACTIONS ECONOMICS EMERGING ECONOMIES EMERGING MARKET EMERGING MARKET ECONOMIES EMERGING MARKETS ENTREPRENEUR ENTREPRENEURS EXPENDITURE FINANCIAL INSTITUTIONS FINANCIAL SECTOR FINANCIAL SECTOR REFORMS FISCAL DEFICITS FISCAL EXPENDITURE FISCAL POLICIES FISCAL POLICY FISCAL SUPPORT FOREIGN BANKS FOREIGN CAPITAL FOREIGN DIRECT INVESTMENT GLOBALIZATION GOOD GOVERNANCE GOVERNANCE SYSTEM GOVERNMENT FINANCE GOVERNMENT GUARANTEES GOVERNMENT INVESTMENT GROWTH RATE GUARANTEE AGENCIES GUARANTEE AGENCY INCOME INFLATION INFRASTRUCTURE INVESTMENT INFRASTRUCTURE PROJECT INFRASTRUCTURE PROJECTS INSTRUMENT INSURANCE INSURANCE SERVICE INTEREST RATE INTERNATIONAL BANK INTERNATIONAL INVESTOR INTERNATIONAL LENDING INTERNATIONAL STANDARD INVESTING INVESTMENT CLIMATE INVESTMENT PROJECTS INVESTMENT RATE JOINT LIABILITY JUDICIAL DECISIONS JUDICIARY LABOR FORCE LEGAL JURISDICTION LENDER LIMITED LIABILITY LIQUIDITY LOAN LONG-TERM INVESTMENT LOW-INCOME COUNTRIES MONETARY POLICY MORTGAGES MULTILATERAL FINANCIAL INSTITUTIONS NOMINAL INTEREST RATE OPPORTUNITY COST POLITICAL ECONOMY PRIVATE ENTREPRENEUR PRIVATE INFRASTRUCTURE PRIVATE INVESTMENT PRIVATE INVESTOR PRIVATE INVESTORS PROBABILITY OF DEFAULT PUBLIC INVESTMENT PUBLIC-PRIVATE PARTNERSHIP PUBLIC-PRIVATE PARTNERSHIPS RAPID GROWTH RECESSION REGULATORY REGIME RETURN RETURNS RISK OF DEFAULT SELF-FINANCE SOVEREIGN DEBT START-UP STATE GUARANTEE STATE GUARANTEES TREASURY TREATY WORLD DEVELOPMENT INDICATORS This paper investigates the role of fiscal guarantees in promoting infrastructure investment. Infrastructure is a critical driver of economic growth, but infrastructure entails significant up-front costs that yield benefits after a time lag. Investors hesitate to put their money down on private infrastructure ventures because of the long lag and governments do not give guarantees for reasons of fiscal prudence. The paper argues that governments and large investment guarantee agencies can in many situations give suitably-calibrated guarantees to private projects by exploiting the fact that a guarantee on one project can reduce the risk of another one failing. The paper works out the architecture of such guarantees, which can be fiscally prudent and yet boost investment, especially in infrastructure, and thereby promote growth. 2014-05-15T16:18:59Z 2014-05-15T16:18:59Z 2014-05 http://documents.worldbank.org/curated/en/2014/05/19456271/fiscal-policy-instrument-investment-growth http://hdl.handle.net/10986/18348 English en_US Policy Research Working Paper;No. 6850 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research South Asia South Asia
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English en_US
topic	ADVERSE SELECTION BANK POLICY BANKRUPT BANKRUPTCY BINDING CONSTRAINT BOOST TO GROWTH BORROWING CAPITAL FORMATION CONTRACT ENFORCEMENT CREDIT DEFAULT CREDIT MARKET DEBT DEBT CRISIS DEBT RATIOS DEFICITS DELIVERY OF GOODS DEPENDENT DEVELOPMENT BANKS DISBURSEMENT EARNINGS ECONOMETRICS ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC POLICY ECONOMIC RECESSION ECONOMIC TRANSACTIONS ECONOMICS EMERGING ECONOMIES EMERGING MARKET EMERGING MARKET ECONOMIES EMERGING MARKETS ENTREPRENEUR ENTREPRENEURS EXPENDITURE FINANCIAL INSTITUTIONS FINANCIAL SECTOR FINANCIAL SECTOR REFORMS FISCAL DEFICITS FISCAL EXPENDITURE FISCAL POLICIES FISCAL POLICY FISCAL SUPPORT FOREIGN BANKS FOREIGN CAPITAL FOREIGN DIRECT INVESTMENT GLOBALIZATION GOOD GOVERNANCE GOVERNANCE SYSTEM GOVERNMENT FINANCE GOVERNMENT GUARANTEES GOVERNMENT INVESTMENT GROWTH RATE GUARANTEE AGENCIES GUARANTEE AGENCY INCOME INFLATION INFRASTRUCTURE INVESTMENT INFRASTRUCTURE PROJECT INFRASTRUCTURE PROJECTS INSTRUMENT INSURANCE INSURANCE SERVICE INTEREST RATE INTERNATIONAL BANK INTERNATIONAL INVESTOR INTERNATIONAL LENDING INTERNATIONAL STANDARD INVESTING INVESTMENT CLIMATE INVESTMENT PROJECTS INVESTMENT RATE JOINT LIABILITY JUDICIAL DECISIONS JUDICIARY LABOR FORCE LEGAL JURISDICTION LENDER LIMITED LIABILITY LIQUIDITY LOAN LONG-TERM INVESTMENT LOW-INCOME COUNTRIES MONETARY POLICY MORTGAGES MULTILATERAL FINANCIAL INSTITUTIONS NOMINAL INTEREST RATE OPPORTUNITY COST POLITICAL ECONOMY PRIVATE ENTREPRENEUR PRIVATE INFRASTRUCTURE PRIVATE INVESTMENT PRIVATE INVESTOR PRIVATE INVESTORS PROBABILITY OF DEFAULT PUBLIC INVESTMENT PUBLIC-PRIVATE PARTNERSHIP PUBLIC-PRIVATE PARTNERSHIPS RAPID GROWTH RECESSION REGULATORY REGIME RETURN RETURNS RISK OF DEFAULT SELF-FINANCE SOVEREIGN DEBT START-UP STATE GUARANTEE STATE GUARANTEES TREASURY TREATY WORLD DEVELOPMENT INDICATORS
spellingShingle	ADVERSE SELECTION BANK POLICY BANKRUPT BANKRUPTCY BINDING CONSTRAINT BOOST TO GROWTH BORROWING CAPITAL FORMATION CONTRACT ENFORCEMENT CREDIT DEFAULT CREDIT MARKET DEBT DEBT CRISIS DEBT RATIOS DEFICITS DELIVERY OF GOODS DEPENDENT DEVELOPMENT BANKS DISBURSEMENT EARNINGS ECONOMETRICS ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC POLICY ECONOMIC RECESSION ECONOMIC TRANSACTIONS ECONOMICS EMERGING ECONOMIES EMERGING MARKET EMERGING MARKET ECONOMIES EMERGING MARKETS ENTREPRENEUR ENTREPRENEURS EXPENDITURE FINANCIAL INSTITUTIONS FINANCIAL SECTOR FINANCIAL SECTOR REFORMS FISCAL DEFICITS FISCAL EXPENDITURE FISCAL POLICIES FISCAL POLICY FISCAL SUPPORT FOREIGN BANKS FOREIGN CAPITAL FOREIGN DIRECT INVESTMENT GLOBALIZATION GOOD GOVERNANCE GOVERNANCE SYSTEM GOVERNMENT FINANCE GOVERNMENT GUARANTEES GOVERNMENT INVESTMENT GROWTH RATE GUARANTEE AGENCIES GUARANTEE AGENCY INCOME INFLATION INFRASTRUCTURE INVESTMENT INFRASTRUCTURE PROJECT INFRASTRUCTURE PROJECTS INSTRUMENT INSURANCE INSURANCE SERVICE INTEREST RATE INTERNATIONAL BANK INTERNATIONAL INVESTOR INTERNATIONAL LENDING INTERNATIONAL STANDARD INVESTING INVESTMENT CLIMATE INVESTMENT PROJECTS INVESTMENT RATE JOINT LIABILITY JUDICIAL DECISIONS JUDICIARY LABOR FORCE LEGAL JURISDICTION LENDER LIMITED LIABILITY LIQUIDITY LOAN LONG-TERM INVESTMENT LOW-INCOME COUNTRIES MONETARY POLICY MORTGAGES MULTILATERAL FINANCIAL INSTITUTIONS NOMINAL INTEREST RATE OPPORTUNITY COST POLITICAL ECONOMY PRIVATE ENTREPRENEUR PRIVATE INFRASTRUCTURE PRIVATE INVESTMENT PRIVATE INVESTOR PRIVATE INVESTORS PROBABILITY OF DEFAULT PUBLIC INVESTMENT PUBLIC-PRIVATE PARTNERSHIP PUBLIC-PRIVATE PARTNERSHIPS RAPID GROWTH RECESSION REGULATORY REGIME RETURN RETURNS RISK OF DEFAULT SELF-FINANCE SOVEREIGN DEBT START-UP STATE GUARANTEE STATE GUARANTEES TREASURY TREATY WORLD DEVELOPMENT INDICATORS Basu, Kaushik Fiscal Policy as an Instrument of Investment and Growth
geographic_facet	South Asia South Asia
relation	Policy Research Working Paper;No. 6850
description	This paper investigates the role of fiscal guarantees in promoting infrastructure investment. Infrastructure is a critical driver of economic growth, but infrastructure entails significant up-front costs that yield benefits after a time lag. Investors hesitate to put their money down on private infrastructure ventures because of the long lag and governments do not give guarantees for reasons of fiscal prudence. The paper argues that governments and large investment guarantee agencies can in many situations give suitably-calibrated guarantees to private projects by exploiting the fact that a guarantee on one project can reduce the risk of another one failing. The paper works out the architecture of such guarantees, which can be fiscally prudent and yet boost investment, especially in infrastructure, and thereby promote growth.
format	Publications & Research :: Policy Research Working Paper
author	Basu, Kaushik
author_facet	Basu, Kaushik
author_sort	Basu, Kaushik
title	Fiscal Policy as an Instrument of Investment and Growth
title_short	Fiscal Policy as an Instrument of Investment and Growth
title_full	Fiscal Policy as an Instrument of Investment and Growth
title_fullStr	Fiscal Policy as an Instrument of Investment and Growth
title_full_unstemmed	Fiscal Policy as an Instrument of Investment and Growth
title_sort	fiscal policy as an instrument of investment and growth
publisher	World Bank, Washington, DC
publishDate	2014
url	http://documents.worldbank.org/curated/en/2014/05/19456271/fiscal-policy-instrument-investment-growth http://hdl.handle.net/10986/18348
_version_	1764440684999213056

Fiscal Policy as an Instrument of Investment and Growth

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