Working Paper: CEPR ID: DP3138
Authors: Angel de la Fuente
Abstract: This Paper compares the observed distribution of the stock of infrastructures across the Spanish regions with the optimal allocation derived from a planning problem in which the observed degree of ex-post redistribution is taken as given. The results suggest that Spanish public investment policy has been too redistributive.
Keywords: infrastructure; regional policy; Spain
JEL Codes: H54
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Spanish public investment policy has been too redistributive (H40) | observed rates of return on infrastructure capital are higher in richer regions (H54) |
| insufficient investment in richer regions (R11) | observed rates of return on infrastructure capital are higher in richer regions (H54) |
| optimal allocation of public capital should reflect a deviation from efficiency favoring poorer regions (H54) | higher marginal utility of income in poorer regions (F61) |
| optimal rates of return on public capital should be lower in poorer regions than in richer ones (H43) | redistribution through public investment has indeed been carried too far (H40) |