Incentive Compatible Reforms : The Political Economy of Public Investments in Mongolia

Hasnain, Zahid

dc.creator	Hasnain, Zahid
dc.date	2012-03-19T18:02:19Z
dc.date	2012-03-19T18:02:19Z
dc.date	2011-05-01
dc.date.accessioned	2023-02-17T20:56:38Z
dc.date.available	2023-02-17T20:56:38Z
dc.identifier	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20110524081958
dc.identifier	http://hdl.handle.net/10986/3430
dc.identifier.uri	http://localhost:8080/xmlui/handle/CUHPOERS/244394
dc.description	Why do politicians distort public investments? And given that public investments are poor because presumably that is what is politically rational, what types of reforms are likely to be both efficiency improving and compatible with the interests of politicians? This paper explores these two questions in the context of Mongolia. It argues that Mongolian members of parliament have an incentive to over-spend on smaller projects that bring benefits to specific geographical localities and to under-spend on large infrastructure that would bring economic benefits to Mongolia on the whole. The incentive for the former is that members of parliament internalize the political benefits from the provision of particular, targeted benefits to specific communities. The disincentive for the latter is that large infrastructure carries a political risk because the political faction in control of that particular ministry would have access to huge rents and become politically too powerful. The identity of these "winners" is uncertain ex ante, given the relatively egalitarian and ethnically homogenous nature of Mongolia's society and polity. Anticipating this risk, members of parliament are reluctant to fund these projects. Since these large infrastructure projects are crucial for national growth, neglecting them hurts all members of parliament. Members of parliament will therefore support reforms that collectively tie their hands by safeguarding large, strategic investment projects from political interference thereby ensuring that no political faction becomes too powerful. This protection of mega-projects would need to be part of a bargain that also allows geographical targeting of some percentage of the capital budget.
dc.language	English
dc.relation	Policy Research working paper ; no. WPS 5667
dc.rights	CC BY 3.0 IGO
dc.rights	http://creativecommons.org/licenses/by/3.0/igo/
dc.rights	World Bank
dc.subject	ACCOUNTABILITY
dc.subject	ACCOUNTING
dc.subject	AGGREGATE LIMITS
dc.subject	ALLEGIANCE
dc.subject	ALLOCATION
dc.subject	ANNUAL BUDGET
dc.subject	APPROPRIATION
dc.subject	APPROPRIATIONS
dc.subject	ASSET PORTFOLIO
dc.subject	BID
dc.subject	BIDS
dc.subject	BUDGET AMENDMENTS
dc.subject	BUDGET BALANCE
dc.subject	BUDGET CYCLE
dc.subject	BUDGET EXECUTION
dc.subject	BUDGET INSTITUTIONS
dc.subject	BUDGET LEGISLATION
dc.subject	BUDGET PLANNING
dc.subject	BUDGET PREPARATION
dc.subject	BUDGET PREPARATION PROCESS
dc.subject	BUDGET PROCESS
dc.subject	BUDGET PROPOSALS
dc.subject	BUDGETARY APPROPRIATIONS
dc.subject	BUDGETARY AUTHORITY
dc.subject	BUDGETING
dc.subject	BUDGETING PROCESS
dc.subject	BUSINESS COMMUNITY
dc.subject	CABINET
dc.subject	CANDIDATES
dc.subject	CAPITAL ASSET
dc.subject	CAPITAL ASSETS
dc.subject	CAPITAL BUDGET
dc.subject	CAPITAL BUDGETING
dc.subject	CAPITAL EXPENDITURES
dc.subject	CAPITAL PROJECTS
dc.subject	CAPITAL STOCK
dc.subject	CASH TRANSFER
dc.subject	CHECKS
dc.subject	CHECKS AND BALANCES
dc.subject	CIVIL SERVANTS
dc.subject	CIVIL SOCIETY
dc.subject	COALITION GOVERNMENTS
dc.subject	COLLECTIVE ACTION
dc.subject	COMMUNISM
dc.subject	COMPETITIVE BIDDING
dc.subject	CONSTITUENCIES
dc.subject	CONSTITUENCY
dc.subject	COST ESTIMATES
dc.subject	COST-BENEFIT ANALYSIS
dc.subject	DEBTS
dc.subject	DEFICITS
dc.subject	DEMOCRACIES
dc.subject	DEMOCRACY
dc.subject	DEMOCRATIC GOVERNMENTS
dc.subject	DEMOCRATIC SYSTEM
dc.subject	DEVELOPING COUNTRIES
dc.subject	DEVELOPING COUNTRY
dc.subject	DEVELOPMENT BANK
dc.subject	DIVISION OF RESPONSIBILITIES
dc.subject	DOMESTIC INVESTMENT
dc.subject	DONOR ASSISTANCE
dc.subject	DUAL BUDGET SYSTEM
dc.subject	DUAL BUDGETING
dc.subject	ECONOMIC ACTIVITY
dc.subject	ECONOMIC DEVELOPMENT
dc.subject	ECONOMIC GROWTH
dc.subject	ECONOMIC POLICY
dc.subject	ECONOMIC RESOURCE
dc.subject	ECONOMIES OF SCALE
dc.subject	EDUCATION LEVEL
dc.subject	ELECTION
dc.subject	ELECTIONS
dc.subject	ELECTORAL SYSTEM
dc.subject	ELECTORATE
dc.subject	ENROLLMENT
dc.subject	ETHNIC GROUPS
dc.subject	EXECUTIVE BUDGET
dc.subject	EXPENDITURE
dc.subject	EXPENDITURE CATEGORIES
dc.subject	EXPENDITURE CUTS
dc.subject	EXPENDITURE GROWTH
dc.subject	EXPENDITURES
dc.subject	EXTERNALITY
dc.subject	FACTION
dc.subject	FINANCIAL ANALYSIS
dc.subject	FISCAL AUTHORITY
dc.subject	FISCAL CONSTRAINTS
dc.subject	FISCAL DISCIPLINE
dc.subject	FISCAL FRAMEWORK
dc.subject	FISCAL INDISCIPLINE
dc.subject	FISCAL OUTCOMES
dc.subject	FISCAL PERFORMANCE
dc.subject	FISCAL RULES
dc.subject	FISCAL STABILITY
dc.subject	GDP
dc.subject	GENERAL TAX REVENUES
dc.subject	GEOGRAPHICAL CONSTITUENCIES
dc.subject	GOVERNMENT EXPENDITURES
dc.subject	HUMAN RESOURCE
dc.subject	IDEOLOGY
dc.subject	INCOME LEVELS
dc.subject	INFLATION
dc.subject	INFLATIONARY PRESSURES
dc.subject	INFRASTRUCTURE INVESTMENT
dc.subject	INFRASTRUCTURE INVESTMENTS
dc.subject	INFRASTRUCTURE PROJECTS
dc.subject	INTERNATIONAL BANK
dc.subject	INTERNATIONAL FINANCIAL INSTITUTIONS
dc.subject	INVENTORY
dc.subject	INVESTING
dc.subject	INVESTMENT BUDGET
dc.subject	INVESTMENT PLAN
dc.subject	INVESTMENT PLANS
dc.subject	INVESTMENT PORTFOLIO
dc.subject	INVESTMENT PROJECTS
dc.subject	INVESTMENT PROPOSALS
dc.subject	LACK OF CREDIBILITY
dc.subject	LACK OF INFORMATION
dc.subject	LEGAL FRAMEWORK
dc.subject	LEGISLATIVE AUTHORITY
dc.subject	LEGISLATIVE BUDGET
dc.subject	LEGISLATIVE POWERS
dc.subject	LEGISLATORS
dc.subject	LOCAL GOVERNMENT
dc.subject	LOCAL GOVERNMENTS
dc.subject	MACRO-STABILITY
dc.subject	MACROECONOMIC INSTABILITY
dc.subject	MARKET FAILURES
dc.subject	MEMBERS OF PARLIAMENT
dc.subject	MINISTRY OF FINANCE
dc.subject	MISALLOCATION OF RESOURCES
dc.subject	MONETARY FUND
dc.subject	MP
dc.subject	MULTIYEAR PROJECTS
dc.subject	NATIONAL DEVELOPMENT
dc.subject	NATIONAL PRIORITIES
dc.subject	NATURAL RESOURCES
dc.subject	OPERATIONAL EFFICIENCY
dc.subject	PARLIAMENTARIAN
dc.subject	PARLIAMENTARIANS
dc.subject	PARLIAMENTARY DEMOCRACY
dc.subject	PARLIAMENTARY PROCEDURES
dc.subject	PERVERSE INCENTIVES
dc.subject	PHYSICAL ASSETS
dc.subject	POLITICAL ECONOMY
dc.subject	POLITICAL LANDSCAPE
dc.subject	POLITICAL PARTIES
dc.subject	POLITICAL PARTY
dc.subject	POLITICAL POWER
dc.subject	POLITICAL RISK
dc.subject	POLITICAL SCIENCE
dc.subject	POLITICIANS
dc.subject	PORK-BARREL
dc.subject	POVERTY REDUCTION
dc.subject	PRIME MINISTER
dc.subject	PRIVATE GOODS
dc.subject	PRIVATE INVESTMENTS
dc.subject	PROCUREMENT POLICY
dc.subject	PROGRAMS
dc.subject	PUBLIC CAPITAL
dc.subject	PUBLIC DEMAND
dc.subject	PUBLIC ECONOMICS
dc.subject	PUBLIC EXPENDITURE
dc.subject	PUBLIC EXPENDITURE MANAGEMENT
dc.subject	PUBLIC EXPENDITURES
dc.subject	PUBLIC GOODS
dc.subject	PUBLIC INVESTMENT
dc.subject	PUBLIC INVESTMENT PROGRAM
dc.subject	PUBLIC INVESTMENTS
dc.subject	PUBLIC SECTOR
dc.subject	PUBLIC SECTOR EMPLOYMENT
dc.subject	RATE OF RETURN
dc.subject	REAL EXCHANGE RATE
dc.subject	REFORM EFFORTS
dc.subject	REFORM STRATEGY
dc.subject	REPUBLIC
dc.subject	RESOURCE ALLOCATION
dc.subject	RETURN
dc.subject	ROAD CONSTRUCTION
dc.subject	ROAD NETWORK
dc.subject	SECTOR CEILINGS
dc.subject	SENIORITY
dc.subject	SOCIAL POLICY
dc.subject	SOCIAL RETURN
dc.subject	SOCIAL TRANSFER
dc.subject	SOCIALISM
dc.subject	STANDING COMMITTEES
dc.subject	STRATEGIC PRIORITIES
dc.subject	STRUCTURAL REFORMS
dc.subject	TAX
dc.subject	TAX BURDEN
dc.subject	TRANSPARENCY
dc.subject	TYPES OF REFORMS
dc.subject	UNCERTAINTY
dc.title	Incentive Compatible Reforms : The Political Economy of Public Investments in Mongolia
dc.type	Publications & Research :: Policy Research Working Paper
dc.coverage	East Asia and Pacific
dc.coverage	East Asia and Pacific
dc.coverage	East Asia
dc.coverage	Asia
dc.coverage	Mongolia