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Infrastructure and Development Interlinkage in West Bengal: A VAR Analysis

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Author Info
Majumder, Rajarshi
Mukherjee, Dipa

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Abstract

Theoretical propositions proclaim that the association between Infrastructure Availability and Development of a region is quite strong and runs from the former to the latter. Empirical studies are however, inconclusive. While few researchers have concluded that the impact of infrastructure on development levels, though positive, is not significant, equally large numbers of studies claim that infrastructure explains a substantial part of development levels. In this paper the association between infrastructural availability and development for the West Bengal economy is explored using a multidimensional approach and a time series study. It is observed that both developmental and infrastructural indices have shown a continuously rising trend during 1971-2001. The causation seems to be stronger from infrastructure to development. The long run relationships suggest strong positive impact of infrastructural availability on development levels. Different facets of infrastructure seem to have different impacts on different dimensions of development. A segmented policy aiming at specific sectors need to be adopted, with the greatest importance being attached to those infrastructural indicators that have highest total impact and strongest 'linkages' across sectors. Only this can sustain the development 'push' generated in West Bengal. Otherwise, the superstructure will have only a weak base and will come crashing down any day.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 4820.

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Date of creation: 2005
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Handle: RePEc:pra:mprapa:4820

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Related research
Keywords: Infrastructure Development Error Correction VAR Time Series

Find related papers by JEL classification:
R11 - Urban, Rural, and Regional Economics - - General Regional Economics - - - Analysis of Growth, Development, and Changes
R58 - Urban, Rural, and Regional Economics - - Regional Government Analysis - - - Regional Development Policy
C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models
R53 - Urban, Rural, and Regional Economics - - Regional Government Analysis - - - Public Facility Location Analysis; Public Investment and Capital Stock
O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures

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