Mongolia : The Politics of Public Investment
Why do politicians distort public investments? And given that public investments are poor, because presumably that is what is politically rational, what types of reforms are likely to be both Efficiency improving and compatible with the interests o...
| Main Author: | |
|---|---|
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
|
| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2014/01/23068831/mongolia-politics-public-investment http://hdl.handle.net/10986/21050 |
| Summary: | Why do politicians distort public
investments? And given that public investments are poor,
because presumably that is what is politically rational,
what types of reforms are likely to be both Efficiency
improving and compatible with the interests of politicians?
This chapter explores these two questions in the context of
Mongolia. It argues that Mongolian members of parliament MPs
have an incentive to over spend on smaller projects that
bring benefits to specific geographical localities and to
under spend on large infrastructure that will bring economic
benefits to Mongolia on the whole. The incentive for the
former is that MPs internalize the political benefits from
the provision of particular, targeted benefits to specific
communities. This chapter is inductive in its structure.
First, the broader public expenditure patterns in Mongolia
are analyzed in order to identify policy maker s priorities
that are, revealed preferences. Then the public investment
management system is examined in depth, identifying the main
Technical and structural weaknesses in the system. Following
that is an analysis of the interests of Key political actors
that are served by poor investments. Given these political
incentives, the final section proposes some incentive
compatible reform options. |
|---|