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The elasticity estimates presented in Table 11 show how responsive consolidated budget per capita infrastructure expenditures are to each of the factors. The urbanization rate, labor force participation rate and level of development are the most important determinants of consolidated budget infrastructure expenditures. All have elasticities greater than 1 in absolute value at the sample mean. Population density, the sectoral balance, and commercial bank flows also have a substantial impact on consolidated budget per capita infrastructure expenditures with elasticities greater than 0.3, but less than 1.0 in absolute value, at the sample mean. The stock of infrastructure, the internal balance, and the size of the foreign sector only have a modest impact on consolidated budget infrastructures, with elasticities ranging between 0.1 and 0.3 in absolute value. Institutional development, the level of foreign savings flows, and the share of foreign investment in foreign savings flows only have a tiny impact on consolidated budget per capita infrastructure expenditures. The estimated elasticities are below 0.1 in absolute value at the sample mean. The relative importance of the different factors, especially those factors with nonlinear relationships, will differ for countries where the value of the factors concerned deviate substantially from the sample mean.

# D. A Comparison **of** Analyses **of Per Capita Infrastructure Expenditure Using Central Budget** vs. Consolidated **Budget Data**

Most of findings regarding the determinants of public infrastructure expenditures are broadly consistent regardless of whether central budget or consolidated budget expenditures are the focus of concern. The most important determinants of infrastructure expenditures are the level of development, the urbanization rate and the labor force participation rate. The size of the foreign sector, sectoral balance, and the stock of infrastructure are also important determinants of per capita infrastructure expenditures. The level and mix of foreign funding play a lesser role, but influence central and consolidated budget per capita infrastructure expenditures in a similar fashion. There is only weak evidence that terms of trade shocks and debt service obligations significantly influence either central or consolidated budget expenditures, although the evidence is stronger for central government expenditures.

Despite these similarities, several factors appear to influence central and consolidated per capita infrastructure expenditures differently. Population density and institutional development, are important determinants of both central and consolidated budget expenditures, but the nature of the relationship differs. The internal balance and external balance appear to be more important determinants of consolidated than central government infrastructure expenditures. Finally, the central government's commitment to poverty alleviation influences central government expenditures on infrastructure, while it appears to have no influence on consolidated budget expenditures.

Infrastructure expenditures increase with the level of development. For central budget, but not consolidated budget expenditures, they are found to increase at a decreasing rate when the level of development is assessed on the basis of GDP per capita in constant