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18 AGORA Int'l J. Jurid. Sci. 152 (2024)
Public Investment, Economic Growth and Efficiency

handle is hein.journals/agoraijjs2024 and id is 157 raw text is: AGORA International Journal of Juridical Sciences, http://univagora.ro/jour/index.php/aiijs ISSN 1843-570X, E-ISSN 2067-7677 Vol. 18, No. 1 (2024), pp. 153-164 PUBLIC INVESTMENT, ECONOMIC GROWTH AND EFFICIENCY E. DANAJ, L. RECI Eni Danajl, Lorela Reei2 University College of Business, Albania 'https-//orcid.or 009-00068732-126, E-mail: endanaj@kubedu.al 2 https-//orcid.org/0009-00062-529-9960, E-mail: koordinatorekub@kub.edu al Abstract: The definition of public investment is not as clear and precise as it may seem. Often, public investments are described as public expenditures that contribute to the stock of physical capital, encompassing tangible assets such as properties (excluding land), buildings and other structures (e.g., roads, airports, hospitals, schools, telecommunication structures, government buildings, bridges, etc.), machinery, transportation equipment, and intangible assets like intellectual property (OECD, 2016). Therefore, public investment is the allocation offunds that result in the growth of the aforementioned items. Public investment can be viewed as a political tool in the hands of a government, capable of altering or determining the course that a country's economy and other aspects of life will take. Governments utilize public investments to respond to a variety of challenges over time, addressing global issues such as climate change and local problems like periods of economic decline, diverse demographic trends, rapid urbanization, or adaptation to new technologies. As emphasized by the European Investment Bank, properly functioning infrastructure networks are the backbone of flourishing economies (European Investment Bank, 2010). Public investments are integral for economic and social prosperity, contributing to the national capital stock by allocating resources to essential basic infrastructure, education, research and development, thereby leading to increased productivity and improved living standards. The aim of this article is to analyze the role of public investments in the economy in addressing contemporary challenges. Keywords: Public investments, the role of public investments in the economy, etc Introduction In the 19th century, economists argued that public investment was important and critical for an industrialized economy seeking to develop further to compete with advanced economies. In that period, public investment was also seen as a basis for independence, national unity and a sense of common purpose. Later, in the first half of the 20th century, in the context of easing the effects of the Great Depression, the role of public investment was further expanded. This is also thanks to the ideology and contribution of the eminent economist John Maynard Keynes, who argued that in conditions of economic recession the market may not be able to self-regulate spontaneously to ensure full employment. Therefore, according to him, the government should intervene by borrowing to finance public investment, in order to give a boost to the economy through the multiplier effect on private investment, demand and consumer confidence. However, subsequent historical and economic circumstances again cast doubt on the dysfunctionality of Keynes's theory. Thus, in the second half of the 20th century, liberal voices re-emerged recalling the benefits of laissez-faire and arguing that public investment crowded 152

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