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Public Capital Investment and Economic Growth in Forth Worth: The Implications for Public Budgeting and Infrastructure Management
Author(s) -
Nunn Samuel
Publication year - 1991
Publication title -
public budgeting and finance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.694
H-Index - 30
eISSN - 1540-5850
pISSN - 0275-1100
DOI - 10.1111/1540-5850.00902
Subject(s) - public infrastructure , public capital , private capital , finance , capital (architecture) , capital budgeting , investment (military) , economics , property tax , public economics , business , physical capital , financial capital , capital expenditure , public investment , foreign direct investment , market economy , macroeconomics , revenue , human capital , debt , public fund , history , archaeology , politics , political science , law
There is a common assumption that local government investment in infrastructure stimulates private development. This article examines relationships in one southwestern city between public capital spending and city infrastructure assets and private economic activity as measured by building permit activity, permit values, and assessed property valuations. Two research questions are examined: (1) Is public investment in new capital associated with private capital formation? and (2) Is public investment associated with improvements in the property tax base? The findings hold implications for infrastructure planning, budgeting, and management. First, public and private capital spending patterns varied in tandem across several cycles, and tracking such cycles may help public managers predict short‐ and mid‐term infrastructure needs. Second, utility capital spending is critically related to private capital formation, and may offer higher fiscal returns than other public infrastructure. Third, infrastructure capital had a strong significant effect on the assessed value of urban property, and will therefore influence the property tax base.