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Public investment allocation across Ecuadorian Provinces

Abstract:

We propose a theoretical framework which allows us to obtain a tractable equation for empirical implementation that relates the growth rate of public investment per capita by the central planner to variables typically associated with traditional public investment allocation criteria. Panel data for the Ecuadorian provinces over the period 2008–2015 are used. The results suggest that the central planner managed to deal with the traditional equity-efficiency trade-off, as well as the decongestion of some public services such as public transport and education. Additional evidence was also found that might raise suspicions regarding distributive politics.