EIB Papers Volume 13. n°1/2008 - European Investment Bank

44 Volume13 N°1 2008 EIB PAPERS
Overall government investment declined in Germany and the United Kingdom but increased
in France and Italy. Government investment in infrastructure and hospitals and schools
combined declined markedly in Germany and slightly in the United Kingdom, thanks to a
rebound in the early 1990s. In France and Italy infrastructure investment stayed stable, while
investment in hospitals and schools boomed in France but shrank in Italy.
The share of public goods investment in GDP was stable in Germany, while it increased
especially in France and Italy. Government investment in redistribution came down dramatically
in the United Kingdom during the early 1980s. In the other three countries developments were
more mixed.
Figure B6 below replicates Figure 11, showing the shares of the components of government
investment in overall government investment.
Figure B6. Composition of government investment (in percent of total government
investment)
100
80
60
40
20
0
77-80
Germany France Italy UK
81-84
85-88
89-93
Source: Eurostat, own calculations
77-80
81-84
85-88
89-93
Redistribution Public Goods Hospitals, schools Infrastructure
Notably, the share of infrastructure investment dropped from almost 40 to 30 percent in
Germany, while increasing from 25 to 35 percent in the United Kingdom, thanks to the
rebound in the early 1990s. There were significant changes in the share of hospitals and
schools in France (up) and Italy (down). The share of investment in public goods increased in
all countries apart from Germany. In France and the United Kingdom, this happened at the
expense of government investment in redistribution, while in Italy the share of investment in
hospitals and schools bore the adjustment.
4.2 Government investment in transportation and communication
This subsection zooms in on government transportation investment, seeking to provide a longer
time perspective to the discussion in Section 3. As noted earlier, the ESA 79 accounts documented
government investment in Transportation and communication as a separate item. As the bulk
of communication investment (especially telecommunications) is recorded as corporate sector
77-80
81-84
85-88
89-93
77-80
81-84
85-88
89-93