Page 125 - Azerbaijan State University of Economics

THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE

for development and investment purposes. These funds are usually

transferred to their equity or created assets are transferred to their
ownership. At the same time entities like “Azal” and “Azerenergy” joint-

stock companies, State Oil Company make investments on their accounts
as well. In this case there is not principal difference between investments

made by injections from the state budget and these made on own account

– the ultimate source is the same. From this point of view the public
investments can be considered both in wide and narrow perspectives. In

wide prospect total investments made in public sector can be classified as
public ones, in narrow prospective only investments financed from the

state budget and non-budgetary funds can be considered as the public

investments. Thus the Organization for Economic Co-operation and
Development public investments is defined as the sum of gross fixed

capital formation (GFCF) and capital transfers payable to business or
households [OECD, 2011:58]. On other hand this approach does not

consider the investments made based on debt financing. This approach
treats the public investments based on their source. The identification of

the government investments influences the estimation opportunities of

these investments within the Country. Considering all above mentioned
factors we carried out our research based on classification of both state

budget and National Accounts.

The role of investments in economic development: theoretical aspect

The public investment made in respect of areas which are out of
control and abilities of the private sector accelerates the material,

financial and information flow and brings about increase in human

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