Advanced Search
MyIDEAS: Login to save this paper or follow this series

Public infrastructure and growth : new channels and policy implications

Contents:

Author Info

  • Agenor, Pierre-Richard
  • Moreno-Dodson, Blanca

Abstract

This paper provides an overview of the various channels through which public infrastructure may affect growth. In addition to the conventional productivity, complementarity, and crowding-out effects typically emphasized in the literature, the impact of infrastructure on investment adjustment costs, the durability of private capital, and the production of health and education services are also highlighted. Effects on health and education are well documented in a number of microeconomic studies, but macroeconomists have only recently begun to study their implications for growth. Links between health, infrastructure, and growth are illustrated in an endogenous growth model with transitional dynamics, and the optimal allocation of public expenditure is discussed. The concluding section draws implications of the analysis for the design of strategies aimed at promoting growth and reducing poverty.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www-wds.worldbank.org/servlet/WDSContentServer/WDSP/IB/2006/11/08/000016406_20061108161655/Rendered/PDF/wps4064.pdf
Download Restriction: no

Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 4064.

as in new window
Length:
Date of creation: 01 Nov 2006
Date of revision:
Handle: RePEc:wbk:wbrwps:4064

Contact details of provider:
Postal: 1818 H Street, N.W., Washington, DC 20433
Phone: (202) 477-1234
Email:
Web page: http://www.worldbank.org/
More information through EDIRC

Related research

Keywords: Transport Economics Policy&Planning; Health Monitoring&Evaluation; Economic Theory&Research; Public Sector Economics&Finance; Private Participation in Infrastructure;

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Olivier Cadot & Lars-Hendrik Röller & Andreas Stephan, 2002. "Contribution to Productivity or Pork Barrel? The Two Faces of Infrastructure Investment," CIG Working Papers FS IV 02-09, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
  2. Pierre Richard Agénor & Devrim Yilmaz, 2006. "The Tyranny of Rules: Fiscal Discipline, Productive Spending, and Growth," The School of Economics Discussion Paper Series 0616, Economics, The University of Manchester.
  3. Torvik, Ragnar, 2001. "Learning by doing and the Dutch disease," European Economic Review, Elsevier, vol. 45(2), pages 285-306, February.
  4. César Calderón & Luis Servén, 2005. "The Effects of Infrastructure Development on Growth and Income Distribution," DEGIT Conference Papers c010_056, DEGIT, Dynamics, Economic Growth, and International Trade.
  5. James R. Tybout, 2000. "Manufacturing Firms in Developing Countries: How Well Do They Do, and Why?," Journal of Economic Literature, American Economic Association, vol. 38(1), pages 11-44, March.
  6. Romp, Ward & de Haan, Jakob, 2005. "Public capital and economic growth: a critical survey," EIB Papers 2/2005, European Investment Bank, Economics Department.
  7. Charles R. Hulten, 1996. "Infrastructure Capital and Economic Growth: How Well You Use It May Be More Important Than How Much You Have," NBER Working Papers 5847, National Bureau of Economic Research, Inc.
  8. Ahmed, Akhter U. & Arends-Kuenning, Mary, 2006. "Do crowded classrooms crowd out learning? Evidence from the food for education program in Bangladesh," World Development, Elsevier, vol. 34(4), pages 665-684, April.
  9. Peter Lorentzen & John McMillan & Romain Wacziarg, 2006. "Death and Development," 2006 Meeting Papers 61, Society for Economic Dynamics.
  10. Shankha Chakraborty, 2002. "Endogenous Lifetime and Economic Growth," University of Oregon Economics Department Working Papers 2002-03, University of Oregon Economics Department, revised 26 Jan 2002.
  11. Valila, Timo & Mehrotra, Aaron, 2005. "Evolution And Determinants Of Public Investment In Europe," Economic and Financial Reports 2005/1, European Investment Bank, Economics Department.
  12. Behrman, Jere R. & Wolfe, Barbara L., 1987. "How does mother's schooling affect family health, nutrition, medical care usage, and household sanitation?," Journal of Econometrics, Elsevier, vol. 36(1-2), pages 185-204.
  13. Robert J. Barro, 1988. "Government Spending in a Simple Model of Endogenous Growth," NBER Working Papers 2588, National Bureau of Economic Research, Inc.
  14. Gernot Doppelhofer & Ronald I. Miller & Xavier Sala-i-Martin, 2000. "Determinants of Long-Term Growth: A Bayesian Averaging of Classical Estimates (BACE) Approach," NBER Working Papers 7750, National Bureau of Economic Research, Inc.
  15. Scott McDonald & Jennifer Roberts, 2004. "Aids and Economic Growth: A Human Capital Approach," Working Papers 2004008, The University of Sheffield, Department of Economics, revised Aug 2004.
  16. Jeffrey P. Cohen & Catherine J. Morrison Paul, 2004. "Public Infrastructure Investment, Interstate Spatial Spillovers, and Manufacturing Costs," The Review of Economics and Statistics, MIT Press, vol. 86(2), pages 551-560, May.
  17. Jan- Sturm & Jakob de Haan, 2005. "Determinants of long-term growth: New results applying robust estimation and extreme bounds analysis," Empirical Economics, Springer, vol. 30(3), pages 597-617, October.
  18. Norman Loayza & Pablo Fajnzylber & César Calderón, 2005. "Economic Growth in Latin America and the Caribbean : Stylized Facts, Explanations, and Forecasts," World Bank Publications, The World Bank, number 7315, October.
  19. van Zon, Adriaan & Muysken, Joan, 2001. "Health and endogenous growth," Journal of Health Economics, Elsevier, vol. 20(2), pages 169-185, March.
  20. Smith, Lisa C. & Haddad, Lawrence James, 2000. "Explaining child malnutrition in developing countries: a cross-country analysis," Research reports 111, International Food Policy Research Institute (IFPRI).
  21. Cavalcanti Ferreira, Pedro, 1999. "Inflationary financing of public investment and economic growth," Journal of Economic Dynamics and Control, Elsevier, vol. 23(4), pages 539-563, February.
  22. Turnovsky, Stephen J, 1996. "Fiscal Policy, Adjustment Costs, and Endogenous Growth," Oxford Economic Papers, Oxford University Press, vol. 48(3), pages 361-81, July.
  23. Lavy, V & Strauss, J & Thomas, D & de Vreyer, P, 1996. "Quality of Health Care, Survivial and Health Outcomes in Ghana," Papers 96-20, RAND - Reprint Series.
  24. Jose Miguel Albala-Bertrand & Emmanouel C. Mamatzakis, 2001. "The Impact of Public Infrastructure on the Productivity of the Chilean Economy," Working Papers 435, Queen Mary, University of London, School of Economics and Finance.
  25. Corrigan, Paul & Glomm, Gerhard & Mendez, Fabio, 2005. "AIDS crisis and growth," Journal of Development Economics, Elsevier, vol. 77(1), pages 107-124, June.
  26. Edward Miguel & Michael Kremer, 2004. "Worms: Identifying Impacts on Education and Health in the Presence of Treatment Externalities," Econometrica, Econometric Society, vol. 72(1), pages 159-217, 01.
  27. Pierre-Richard Agénor & Nihal Bayraktar & Emmanuel Pinto Moreira & Karim El Aynaoui, 2006. "Achieving the Millennium Development Goals in Sub-Saharan Africa: A Macroeconomic Monitoring Framework," The World Economy, Wiley Blackwell, vol. 29(11), pages 1519-1547, November.
  28. Gupta, Sanjeev & Clements, Benedict & Baldacci, Emanuele & Mulas-Granados, Carlos, 2005. "Fiscal policy, expenditure composition, and growth in low-income countries," Journal of International Money and Finance, Elsevier, vol. 24(3), pages 441-463, April.
  29. Tamura, Robert, 2006. "Human capital and economic development," Journal of Development Economics, Elsevier, vol. 79(1), pages 26-72, February.
  30. Bhargava, Alok & Jamison, Dean T. & Lau, Lawrence J. & Murray, Christopher J. L., 2001. "Modeling the effects of health on economic growth," Journal of Health Economics, Elsevier, vol. 20(3), pages 423-440, May.
  31. Pierre Richard Agénor & Kyriakos C. Neanidis, 2006. "The Allocation of Public Expenditure and Economic Growth," The School of Economics Discussion Paper Series 0608, Economics, The University of Manchester.
  32. Oded Galor & David Mayer-Foulkes, 2004. "Food for Thought: Basic Needs and Persistent Educational Inequality," GE, Growth, Math methods 0410002, EconWPA.
  33. Shantayanan Devarajan & Vinaya Swaroop & Heng-fu Zou, 1996. "The composition of public expenditure and economic growth," CEMA Working Papers 77, China Economics and Management Academy, Central University of Finance and Economics.
  34. Jere H. Behrman, 1976. "Economic Growth," NBER Chapters, in: Foreign Trade Regimes and Economic Development: Chile, pages 268-292 National Bureau of Economic Research, Inc.
  35. Klaus Deininger & Anja Crommelynck & Gloria Kempaka, 2005. "Impact of AIDS on Family Composition, Welfare, and Investment: Evidence from Uganda ," Review of Development Economics, Wiley Blackwell, vol. 9(3), pages 303-324, 08.
  36. Fuchs, Victor R., 2004. "Reflections on the socio-economic correlates of health," Journal of Health Economics, Elsevier, vol. 23(4), pages 653-661, July.
  37. Paxson, Christina & Schady, Norbert, 2005. "Cognitive development among young children in Ecuador : the roles of wealth, health and parenting," Policy Research Working Paper Series 3605, The World Bank.
  38. Don Webber, 2002. "Policies to stimulate growth: should we invest in health or education?," Applied Economics, Taylor & Francis Journals, vol. 34(13), pages 1633-1643.
  39. Gilbert,Christopher L. & Vines,David (ed.), 2006. "The World Bank," Cambridge Books, Cambridge University Press, number 9780521029018, April.
  40. Emanuele Baldacci & Qiang Cui & Benedict J. Clements & Sanjeev Gupta, 2004. "Social Spending, Human Capital, and Growth in Developing Countries," IMF Working Papers 04/217, International Monetary Fund.
  41. Rioja, Felix K., 2003. "Filling potholes: macroeconomic effects of maintenance versus new investments in public infrastructure," Journal of Public Economics, Elsevier, vol. 87(9-10), pages 2281-2304, September.
  42. Hurlin, Christophe, 2006. "Network effects of the productivity of infrastructure in developing countries," Policy Research Working Paper Series 3808, The World Bank.
  43. David N. Weil, 2007. "Accounting for The Effect of Health on Economic Growth," The Quarterly Journal of Economics, MIT Press, vol. 122(3), pages 1265-1306, 08.
  44. Devarajan, Shantayanan & Easterly, William R & Pack, Howard, 2003. "Low Investment Is Not the Constraint on African Development," Economic Development and Cultural Change, University of Chicago Press, vol. 51(3), pages 547-71, April.
  45. Fedderke, J.W. & Perkins, P. & Luiz, J.M., 2006. "Infrastructural investment in long-run economic growth: South Africa 1875-2001," World Development, Elsevier, vol. 34(6), pages 1037-1059, June.
  46. Filmer, Deon & Hammer, Jeffrey S & Pritchett, Lant H, 2000. "Weak Links in the Chain: A Diagnosis of Health Policy in Poor Countries," World Bank Research Observer, World Bank Group, vol. 15(2), pages 199-224, August.
  47. Daniel S. Hamermesh & Gerard A. Pfann, 1996. "Adjustment Costs in Factor Demand," Journal of Economic Literature, American Economic Association, vol. 34(3), pages 1264-1292, September.
  48. Reinikka, Ritva & Svensson, Jakob, 2002. "Coping with poor public capital," Journal of Development Economics, Elsevier, vol. 69(1), pages 51-69, October.
  49. Ken-ichi Hashimoto & Ken Tabata, 2005. "Health Infrastructure, Demographic Transition and Growth," Review of Development Economics, Wiley Blackwell, vol. 9(4), pages 549-562, November.
  50. David E. Bloom & David Canning & Mark Weston, 2005. "The Value of Vaccination," World Economics, World Economics, Economic & Financial Publishing, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE, vol. 6(3), pages 15-39, July.
  51. Niloy Bose & M. Emranul Haque & Denise R. Osborn, 2007. "Public Expenditure And Economic Growth: A Disaggregated Analysis For Developing Countries," Manchester School, University of Manchester, vol. 75(5), pages 533-556, 09.
  52. Nikos Benos, 2005. "Fiscal Policy and Economic Growth: Empirical Evidence from OECD," University of Cyprus Working Papers in Economics 1-2005, University of Cyprus Department of Economics.
  53. Bloom, David E. & Canning, David & Sevilla, Jaypee, 2004. "The Effect of Health on Economic Growth: A Production Function Approach," World Development, Elsevier, vol. 32(1), pages 1-13, January.
  54. Arndt, Channing, 2006. "HIV/AIDS, human capital, and economic growth prospects for Mozambique," Journal of Policy Modeling, Elsevier, vol. 28(5), pages 477-489, July.
  55. Kalaitzidakis, Pantelis & Kalyvitis, Sarantis, 2004. "On the macroeconomic implications of maintenance in public capital," Journal of Public Economics, Elsevier, vol. 88(3-4), pages 695-712, March.
  56. Ireland, Peter N., 1994. "Supply-side economics and endogenous growth," Journal of Monetary Economics, Elsevier, vol. 33(3), pages 559-571, June.
  57. Kyu Sik Lee & Anas, Alex & Gi-Taik Oh, 1996. "Costs of infrastructure deficiencies in manufacturing in Indonesia, Nigeria, and Thailand," Policy Research Working Paper Series 1604, The World Bank.
  58. J. Luis Guasch, 2004. "Granting and Renegotiating Infrastructure Concessions : Doing it Right," World Bank Publications, The World Bank, number 15024, October.
  59. Gramlich, Edward M, 1994. "Infrastructure Investment: A Review Essay," Journal of Economic Literature, American Economic Association, vol. 32(3), pages 1176-96, September.
  60. Lee, Lung-fei & Rosenzweig, Mark R. & Pitt, Mark M., 1997. "The effects of improved nutrition, sanitation, and water quality on child health in high-mortality populations," Journal of Econometrics, Elsevier, vol. 77(1), pages 209-235, March.
  61. Teruel, Romeo G. & Kuroda, Yoshimi, 2005. "Public infrastructure and productivity growth in Philippine agriculture, 1974-2000," Journal of Asian Economics, Elsevier, vol. 16(3), pages 555-576, June.
  62. Gyimah-Brempong, Kwabena & Wilson, Mark, 2004. "Health human capital and economic growth in Sub-Saharan African and OECD countries," The Quarterly Review of Economics and Finance, Elsevier, vol. 44(2), pages 296-320, May.
  63. Behrman, Jere R, 1996. "The Impact of Health and Nutrition on Education," World Bank Research Observer, World Bank Group, vol. 11(1), pages 23-37, February.
  64. Paul Glewwe, 2002. "Schools and Skills in Developing Countries: Education Policies and Socioeconomic Outcomes," Journal of Economic Literature, American Economic Association, vol. 40(2), pages 436-482, June.
  65. John Newman & Menno Pradhan & Laura B. Rawlings & Geert Ridder & Ramiro Coa & Jose Luis Evia, 2002. "An Impact Evaluation of Education, Health, and Water Supply Investments by the Bolivian Social Investment Fund," World Bank Economic Review, World Bank Group, vol. 16(2), pages 241-274, August.
  66. Clive Bell & Shantayanan Devarajan & Hans Gersbach, 2006. "The Long-Run Economic Costs of aids: A Model with an Application to South Africa," World Bank Economic Review, World Bank Group, vol. 20(1), pages 55-89.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Arturo Harker & Marcela Melendez, 2008. "Revisiting Economic Growth in Colombia: A Microeconomic Perspective," Research Department Publications 2006, Inter-American Development Bank, Research Department.
  2. Lin, Justin Yifu, 2013. "Global infrastructure initiative and global recovery," Journal of Policy Modeling, Elsevier, vol. 35(3), pages 400-411.
  3. Kohei Daido & Ken Tabata, 2012. "Public Infrastructures, Production Organizations, and Economic Development," Discussion Paper Series 93, School of Economics, Kwansei Gakuin University, revised Aug 2012.
  4. Moreno-Dodson, Blanca, 2008. "Assessing the impact of public spending on growth - an empirical analysis for seven fast growing countries," Policy Research Working Paper Series 4663, The World Bank.
  5. Steckel, Jan Christoph & Brecha, Robert J. & Jakob, Michael & Strefler, Jessica & Luderer, Gunnar, 2013. "Development without energy? Assessing future scenarios of energy consumption in developing countries," Ecological Economics, Elsevier, vol. 90(C), pages 53-67.
  6. Stephane Straub, 2008. "Infrastructure and Growth in Developing Countries: Recent Advances and Research Challenges," ESE Discussion Papers 179, Edinburgh School of Economics, University of Edinburgh.
  7. Zhou, Xiaoyan & Zhang, Jie & Li, Junpeng, 2013. "Industrial structural transformation and carbon dioxide emissions in China," Energy Policy, Elsevier, vol. 57(C), pages 43-51.
  8. World Bank, 2011. "Challenges to Enterprise Performance in the Face of the Financial Crisis : Eastern Europe and Central Asia," World Bank Publications, The World Bank, number 2316, October.
  9. Seethepalli, Kalpana & Bramati, Maria Caterina & Veredas, David, 2008. "How relevant is infrastructure to growth in East Asia ?," Policy Research Working Paper Series 4597, The World Bank.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:4064. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roula I. Yazigi).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.