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 i...
| Main Authors: | , |
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| Format: | Policy Research Working Paper |
| Language: | English |
| Published: |
2012
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| Subjects: | |
| 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 http://hdl.handle.net/10986/3668 |
| Summary: | 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. |
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