Quality of Institutions and Private Investments in Infrastructure

This article investigates the impact of institutional environment on the volumes of private investments in infrastructural sectors in low and middle income countries. Econometric models for limited dependent variables (Tobit, Heckit) and count variables (Poisson) are used for analysis. The obtained results support the theoretical predictions on positive impact of better institutions’ quality on probability of observing private infrastructural projects, total number of such projects and total volume of private infrastructural investments. The practical value of the work is in emphasizing of importance of proper institutional policy for attracting private investments in infrastructural sectors.

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