May 2000 - Using the word capital to represent two different concepts is not such a problem when government is responsible for only a small fraction of national investment and is reasonably effective (as in the United States). But when government is a major investor and is ineffective, the gap...

This paper attempts to explain the scarcity of rigorous evaluations of public policy. I build a positive model to explain the "stylized fact" that there is under investment in the creation of reliable empirical knowledge about the impacts of public sector actions. The model shows how "advocates"...