On July 6th we have discussed our latest report “Can the state be a good investor?” with Philipp Heimberger (wiiw) and Wojciech Paczos (University of Cardiff).
Public investment is much more than just new roads, buildings and other infrastructure. There is already extensive and still growing scientific literature which shows that public expenditure on citizens skills and health have a substantial and sometimes unexpected return to the economy. This is however not reflected in the statistics – we still rely on the traditional definition, in which the final result of the investment must always be something physical. This distorts our image of the public sector and provides inappropriate incentives.
The contribution for the discussion will be our policy paper „Can the state be a good investor?”. Based on the literature we show, that particularly high returns from public expenditure are obtained on investment in human capital: childcare, education, preventive healthcare or health improvement. The final result of the study – which we want to discuss in particular – is the proposition to include investment in human capital in the official definition of public investment.
Spending on infrastructure makes up just 20% of all public investment in EU countries. The remaining 80% can be classified as investment in human capital – spending on citizens’ health and education.
— Polski Instytut Ekonomiczny (@PIE_NET_PL) July 6, 2021
We have discussed the report with Philipp Heimberger (wiiw) and Wojciech Paczos (University of Cardiff).
The report was presented by Jakub Sawulski, head of PEI’s macroeconomics team.
Introductory remarks and moderation by Piotr Arak, director of the Polish Economic Institute.