Openness, lobbying, and provision of infrastructure

    Authors

    U. Chakravorty;J. Mazumdar

    Comments

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    Abbreviated Journal Title

    South. Econ. J.

    Keywords

    MARKET SHARE RIVALRY; PUBLIC INFRASTRUCTURE; ECONOMIC-GROWTH; TRADE; INVESTMENT; POLICY; Economics

    Abstract

    Casual empirical evidence suggests that infrastructure provision is higher in economies that are open to world trade. We develop a model of imperfect competition to show that open economies are likely to provide more infrastructure than closed economies. If infrastructure is financed by taxing a producer lobby, the open economy will overprovide while the closed economy will underinvest; an open economy approaches optimal provision when this lobby group is small in size. If financing of infrastructure is done by taxing the whole population, the closed-economy outcome may be preferred relative to that of the open economy.

    Journal Title

    Southern Economic Journal

    Volume

    74

    Issue/Number

    4

    Publication Date

    1-1-2008

    Document Type

    Article

    Language

    English

    First Page

    1149

    Last Page

    1166

    WOS Identifier

    WOS:000255820800013

    ISSN

    0038-4038

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