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Abstract
The contribution of public capital on economic growth has been the focus of only few studies and has to date focused mainly on developed countries. Moreover it is only lately that the link has been analysed in a dynamic framework, allowing for feedback effects. The empirical literature has hardly dealt with small economies such as Mauritius. The present paper builds on a production function approach, using a unique time series dataset over the period 1950 – 2000, to derive the association between public capital and economic performance and economic growth for Mauritius. Given the non-stationary characteristics of the data, a vector-error-correction mechanism (VECM) is used to model the dynamics. Public capital is shown to have significantly contributed to Mauritian economic performance. Moreover results suggest that there may be indirect effects via private capital accumulation as well.