Structural adjustment and Public Sector Investment Program in the Caribbean

In this paper, we analyze the dynamics of public sector investment programs (PSIP) and structural adjustment programs (SAP) in the Caribbean region. U tilizing regression analysis, we specifically examine the impact of the PSI P on two Caribbean countries (Trinidad & Tobago and Guyana). These countrie s are good representations of independent states where PSIP plays a fundame ntal role and SEP programs have been implemented. We find positive correlat ion between public sector investment, private sector investment and growth in gross domestic product (GDP). The results support the fundamental argume nt that public sector investment crowds-in the private sector investment. W e argue that the PSIP can be the base on which structural adjustment progra ms in the Caribbean region can be designed.