Best practices in economic growth in transition countries: operational excellence model

At the beginning of the twentieth century in many developed and developing countries, state spending was only a small part of the gross domestic product (GDP). However, this changed in the following sixty years (Hindricks & Myles, 2013). Some economists such as Harrod and Domar have argued that countries need capital to grow, and a correlation between increased capital spending and increased growth exists. Additionally, it is supposed that public investments increase productivity and competitiveness, as it positively affects the capacity of private and public sectors and improves services. It may also induce real income, as well as increase and improve social well-being. Theoretically, this leads to population and employment growth and thus creates funds for new investments. Therefore, the link between public investment and economic growth deserves more attention in transition countries as well, as it is seen as a way to reduce poverty. The paper describes the methodology for selecting empirical studies as well as for analyzing and discussing their findings, concerning the influence of public investment on economic growth in selected transition countries. The selected studies used data from Central and Eastern Europe, Baltic countries and the Commonwealth of Independent States. The findings will be discussed from the standpoint of the economic growth models.