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The Impact of Public Infrastructure on the Productivity of the Chilean Economy

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  • José M. Albala‐Bertrand
  • Emmanuel C. Mamatzakis

Abstract

The aim of this study is to assess the effect of the change in infrastructure capital on the cost structure of the Chilean economy, and thereby on productivity, differentiating between two key institutional periods. A further aim is to establish the extent to which infrastructure capital formation affects private capital. The authors use an econometric estimation of the cost elasticity of infrastructure. Conclusions indicate that an increased infrastructure capital reduces the production cost of the economy, thereby increasing productivity, mostly in the second period. In turn, especially in this latter period, infrastructure capital formation appears to assert both a positive cost‐share effect on private capital and a negative cost‐share effect on labor. These effects can be explained to a large extent by the significant differences between the institutional structures of the two consecutive periods studied.

Suggested Citation

  • José M. Albala‐Bertrand & Emmanuel C. Mamatzakis, 2004. "The Impact of Public Infrastructure on the Productivity of the Chilean Economy," Review of Development Economics, Wiley Blackwell, vol. 8(2), pages 266-278, May.
    • Handle: RePEc:bla:rdevec:v:8:y:2004:i:2:p:266-278
    DOI: 10.1111/j.1467-9361.2004.00232.x
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables

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