{"type":"script","doc_desc":{"producers":[{"name":"Reproducibility WBG","abbr":"DIME","affiliation":"World Bank - Development Impact Department","role":"Verification and preparation of metadata"}],"prod_date":"2024-12-12","version":"1"},"project_desc":{"authoring_entity":[{"name":"John Nana Francois","email":"jfrancois1@worldbank.org","affiliation":"World Bank"},{"name":"Maty Konte","email":"mkonte@ifc.org","affiliation":"International Finance Corporation (IFC)"},{"name":"Franz U Ruch","affiliation":"World Bank ","email":"fruch@worldbank.org"}],"output":[{"type":"Working Paper","title":"\u201cCrowding In\u201d Effect of Public Investment on Private Investment Revisited","authors":"John Nana Francois, Maty Konte, Franz U Ruch","description":"Policy Research Working Paper (PRWP) 10881","uri":"http:\/\/documents.worldbank.org\/curated\/en\/099758508262487557\/IDU1dc47dca51c0df1421119d3711c2f5026019e","doi":"https:\/\/doi.org\/10.1596\/1813-9450-10881"}],"title_statement":{"idno":"RR_WLD_2024_187","title":"Reproducibility package for \u201cCrowding In\u201d Effect of Public Investment on Private Investment Revisited"},"production_date":"2024-12","abstract":"Current investment trends in emerging market and developing economies are not enough to meet the needs of their growing populations and will fall short of achieving the Sustainable Development Goals related to human and physical capital development. Public investment can play a critical role in addressing this shortfall, especially if it can crowd-in private investment.  Using a tractable model and panel data for 109 developing countries from 1980\u20132019, this paper investigates whether public investment crowds in or crowds out private investment. The paper also explores how the relationship changes across different groups of countries and under different institutional settings.  The analysis uses changes in predicted disbursements on loans from official creditors to developing country governments as an instrument for changes in public investment. The findings show that public investment is a complement to private investment, raising the marginal productivity of the latter. As a result, an extra dollar of public investment raises private investment by 1.6 dollars. The findings also reveal stronger evidence of crowding-in of private investment in low-income countries and Sub-Saharan Africa, where investment needs are greatest. Finally, the findings are embedded in a model with imperfect capital markets, which shows that public investment can be used as an effective vehicle to address underinvestment issues induced by capital market distortions. ","geographic_units":[{"name":"World","code":"WLD"}],"keywords":[{"name":"Capital markets distortions"},{"name":"Crowding-in"},{"name":"Public investment"},{"name":"Private investment"},{"name":"Instrumental variable"}],"topics":[{"id":"E22","uri":"https:\/\/www.aeaweb.org\/econlit\/jelCodes.php?view=jel","vocabulary":"Journal of Economic Literature","name":"Investment \u2022 Capital \u2022 Intangible Capital \u2022 Capacity"},{"uri":"https:\/\/www.aeaweb.org\/econlit\/jelCodes.php?view=jel","vocabulary":"Journal of Economic Literature","id":"E23","name":"Production"},{"uri":"https:\/\/www.aeaweb.org\/econlit\/jelCodes.php?view=jel","vocabulary":"Journal of Economic Literature","id":"H11","name":"Structure, Scope, and Performance of Government"}],"datasets":[{"name":"Investment and Capital Stock Dataset","uri":"https:\/\/data.imf.org\/ICSD","note":"Source: IMF\nLocated at: \\Reproducibility package\\Data\nFile name: IMFInvestmentandCapitalStockDataset2021.xlsx","access_type":"Included in the reproducibility package"},{"name":"IMF\u2019s Financial Development Index database","uri":"https:\/\/data.imf.org\/fdindex","note":"Source: IMF\nLocated at: \\Reproducibility package\\Data\nFilename: FD_Database_STATA.dta","access_type":"Included in the reproducibility package"},{"name":"Chinn-Ito financial openness data ","uri":"https:\/\/web.pdx.edu\/~ito\/Chinn-Ito_website.htm","note":"Source:  Menzie Chinn, University of Wisconsin, Madison, NBER and Hiro Ito, Portland State University\nLocated at: \\Reproducibility package\\Data\nFilename: kaopen_2021.dta","access_type":"Included in the reproducibility package"},{"name":"World Economic Outlook Database","note":"Source: IMF\nLocated at: \\Reproducibility package\\Data\nFilename: WEO_Data.xlsx","uri":"https:\/\/www.imf.org\/en\/Publications\/SPROLLs\/world-economic-outlook-databases","access_type":"Included in the reproducibility package"},{"uri":"https:\/\/datahelpdesk.worldbank.org\/knowledgebase\/articles\/906519-world-bank-country-and-lending-groups","name":"World Bank Country and Lending Groups","note":"Source: World Bank\nLocated at: \\Reproducibility package\\Data\nFile names: ida_wdi_2024.xlsx, regional_dummy.dta, and wdi_income_classifications_2024.xlsx.\n","access_type":"Included in the reproducibility package"},{"name":"Aggregated Loan-level data ","note":"Source: World Bank\u2019s Debtor Reporting System \nLocated at: \\Reproducibility package\\Data\nFile name: Aggregated_DRS.dta","access_type":"This dataset is temporarily embargoed by the authors (expected to be made public in the future)."},{"note":"Source: World Bank\u2019s Debtor Reporting System \nThe instrumental variables is based on debt instrument\u00a0level\u00a0data from the World Bank\u2019s Debtor Reporting System (DRS) which is strictly confidential and not publicly available. \n\nFor more information, see here: https:\/\/datahelpdesk.worldbank.org\/knowledgebase\/articles\/381934-what-is-the-external-debt-reporting-system-drs\n","name":"Loan-level data ","access_type":"This data is restricted and has not been included in the reproducibility package. For more details, please refer to the README file."}],"software":[{"name":"Stata ","version":"18 MP"}],"scripts":[{"file_name":"RR_WLD_2024_187","zip_package":"RR_WLD_2024_187.zip ","title":"Reproducibility package (partial code and partial data) for The \u201cCrowding In\u201d Effect of Public Investment on Private Investment Revisited","date":"2024-12","dependencies":"All dependencies are in the ado folder.","notes":"Computational reproducibility verified by Development Impact (DIME) Analytics team, World Bank"}],"data_statement":"Some data is restricted and has not been included in the reproducibility package. For more details, please refer to the README file.","reproduction_instructions":"This package begins with intermediate data (Aggregated_DRS.dta) due to the restricted nature of the raw loan-level data. The raw data and the code to generate the intermediate data were not shared with the reproducibility team. Instead, verification was conducted virtually, with authors running the code to produce the intermediate data. \nTo run the package from this intermediate data replicators should follow these steps.\n1. Setup: Update the directory paths in the main do-file FKR_2024_CrowdingIn.do to reflect your file locations.\n2. Intermediate Data: Once the embargo on Aggregated_DRS.dta is lifted, place the file in the appropriate folder as specified in the package.\n3. Run the Code: Execute the main do-file FKR_2024_CrowdingIn.do to reproduce results.\n\nLimitations: All exhibits can be replicated except for Figure 2 and Table B1, which require restricted raw data and were verified virtually.\nAs the data is embargoed at the moment, we include the outputs of the verification in this package for reviewers to compare against the paper.","technology_requirements":"Runtime: 15 minutes","technology_environment":"Paper exhibits were reproduced on a computer with the following specifications:\n\u2022 OS: Windows 10 Enterprise, version 22H2\n\u2022 Processor: Intel(R) Xeon(R) Gold 6132 CPU @ 2.60GHz 2.60 GHz (2 processors)\n\u2022 Memory available: 128 GB\n\u2022 Software version: Stata 18 MP","disclaimer":"The materials in the reproducibility packages are distributed as they were prepared by the staff of the International Bank for Reconstruction and Development\/The World Bank. The findings, interpretations, and conclusions expressed in this event do not necessarily reflect the views of the World Bank, the Executive Directors of the World Bank, or the governments they represent. The World Bank does not guarantee the accuracy of the materials included in the reproducibility package.","license":[{"name":"Modified BSD3 ","uri":"https:\/\/opensource.org\/license\/bsd-3-clause\/"}],"contacts":[{"email":"fruch@worldbank.org","affiliation":"World Bank","name":"Franz U Ruch"},{"name":"Reproducibility WBG ","affiliation":"World Bank","email":"reproducibility@worldbank.org"}],"language":[{"name":"English","code":"EN"}],"repository_uri":[{"name":"Reproducible Research Repository (World Bank)","uri":"https:\/\/reproducibility.worldbank.org"}]},"tags":[{"tag":"DOI"},{"tag":"Restricted code"},{"tag":"Restricted data"}],"schematype":"script"}