The Tyranny of Concepts : CUDIE (Cumulated, Depreciated Investment Effort) is NOT capital

Pritchett, Lant

World Bank, Washington, DC

关键词: ACCOUNTING;    ACTUAL COSTS;    AGENCY PROBLEMS;    ASSETS;    CAPACITY UTILIZATION;   

DOI  :  10.1596/1813-9450-2341
RP-ID  :  WPS2341

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

The cost of public investment is not thevalue of public capital. Unlike for private investors, thereis no remotely plausible behavioral model of the governmentas investor that suggests that every dollar the publicsector spends as "investment" creates capital inan economic sense. This seemingly obvious point has so farbeen uniformly ignored in the voluminous empiricalliterature on economic growth, which uses, at best,"cumulated, depreciated investment effort"(CUDIE), to estimate capital stocks. But in developingcountries especially, the difference between investmentcumulated at cost and capital value is of primary empiricalimportance: government investment is half or more of totalinvestment. And perhaps as much as half, or more ofgovernment investment spending has not created equivalent"capital." This suggests that nearly everythingempirical written in three broad areas is misguided. First,none of the estimates of the impact of public spendingidentify the productivity of public capital. Even wherepublic capital could be very productive, regressions andevaluations, may suggest that public investment spending haslittle impact. Second, everything currently said about"total factor productivity" in developingcountries is deeply suspect, as there is no way empiricallyto distinguish between low output (or growth) attributableto investments that created no "factors" and lowoutput (or growth) attributable to low (or slow growth in)productivity in using accumulated "factors."Third, multivariate growth regressions to date have not, infact, "controlled" for the growth of capitalstock, so spurious interpretations have emerged.