Public expenditure on infrastructure and economic growth across Brazilian states

This paper aims at analyzing theoretically and empirically the role of infrastructure expenditure on economic growth in Brazil from 1986 to 2003. The hypothesis is that public infrastructure expenditures in transport are central to foster sustainable growth in Brazil. Theoretical and empirical literature highlights the fact that this type of investment fosters economic growth and the multiplier by means of its effects on productivity. By using a panel data model to Brazilian states, conclusions highlight the fact that infrastructure investments are one of the demand constraints to growth in Brazil.