Infrastructure and economic geography: An overview of theory and evidence
AbstractThis essay provides an overview of the role of infrastructure on economic geography in the light of both theoretical and empirical findings. Two main lessons stand out. First, infrastructural improvements affect the geographical distribution of economic activities. Second, even when localized, infrastructure investment generates externalities that may diffuse quite far across the economy. These two lessons have two far-reaching policy implications. First, effective infrastructure projects require knowledge on their impacts on the spatial distribution of economic activities. These impacts depend crucially on the specific details of the projects and the specific sources of agglomeration economies they affect. Second, regions need to coordinate not only in terms of interregional infrastructure projects but also in terms of intraregional ones if they want to avoid beggar-thyneighbour and self-defeating outcomes.
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Bibliographic InfoPaper provided by European Investment Bank, Economics Department in its series EIB Papers with number 6/2008.
Length: 28 pages
Date of creation: 18 Jul 2008
Date of revision:
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agglomeration; infrastructure; regional development; transport networks;
Find related papers by JEL classification:
- F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
- F15 - International Economics - - Trade - - - Economic Integration
- F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
- R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-05-23 (All new papers)
- NEP-GEO-2009-05-23 (Economic Geography)
- NEP-PPM-2009-05-23 (Project, Program & Portfolio Management)
- NEP-URE-2009-05-23 (Urban & Real Estate Economics)
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