This article analyses the contribution of public investment to economic growth in Southern Italy in the second half of the twentieth century (1951–2011). The Bai–Perron tests suggest that economic growth followed three distinct regimes: accelerated growth in the years 1951–1973 (average growth rate 5.3%); low growth in the period 1974–1995 (average growth rate 1.6%); zero growth on average after 1995. Using cointegration analysis, we find a positive effect of public investment on per unit of labour output of the Mezzogiorno in the whole period, 1951–2011. However, the estimates of the model show statistically significant parameters of public investment in the first regime, but not in the second regime, when economic growth is sustained by business investment and technical change. The last phase of growth sees the negative influence of the social and institutional environment on the functioning of the economy. The different impact of public investment on growth over time is ascribed to changes in the quality of institutions.

Public investment and growth: Lessons learned from 60-years experience in Southern Italy

Lepore, A.;Papagni, E.;Baraldi, L.;Alfano, R.
2021

Abstract

This article analyses the contribution of public investment to economic growth in Southern Italy in the second half of the twentieth century (1951–2011). The Bai–Perron tests suggest that economic growth followed three distinct regimes: accelerated growth in the years 1951–1973 (average growth rate 5.3%); low growth in the period 1974–1995 (average growth rate 1.6%); zero growth on average after 1995. Using cointegration analysis, we find a positive effect of public investment on per unit of labour output of the Mezzogiorno in the whole period, 1951–2011. However, the estimates of the model show statistically significant parameters of public investment in the first regime, but not in the second regime, when economic growth is sustained by business investment and technical change. The last phase of growth sees the negative influence of the social and institutional environment on the functioning of the economy. The different impact of public investment on growth over time is ascribed to changes in the quality of institutions.
File in questo prodotto:
Non ci sono file associati a questo prodotto.

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11591/425932
Citazioni
  • ???jsp.display-item.citation.pmc??? ND
  • Scopus 19
  • ???jsp.display-item.citation.isi??? 18
social impact