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Public infrastructure and growth : new channels and policy implications

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  • 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.

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Bibliographic Info

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

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Date of creation: 01 Nov 2006
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Handle: RePEc:wbk:wbrwps:4064

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

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Cited by:
  1. 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.
  2. 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.
  3. Arturo Harker & Marcela Melendez, 2008. "Revisiting Economic Growth in Colombia: A Microeconomic Perspective," Research Department Publications 2006, Inter-American Development Bank, Research Department.
  4. Pierre-Richard Agénor, 2006. "A Theory of Infrastructure-led Development," Centre for Growth and Business Cycle Research Discussion Paper Series 83, Economics, The Univeristy of Manchester.
  5. Straub, Stephane, 2008. "Infrastructure and growth in developing countries : recent advances and research challenges," Policy Research Working Paper Series 4460, The World Bank.
  6. Pierre-Richard Agénor & Kyriakos C. Neanidis, 2007. "Optimal Taxation and Growth with Public Goods and Costly Enforcement," Centre for Growth and Business Cycle Research Discussion Paper Series 89, Economics, The Univeristy of Manchester.
  7. Pierre-Richard Agénor, 2006. "A Theory of Infrastructure-led Development," The School of Economics Discussion Paper Series 0640, Economics, The University of Manchester.
  8. Lin, Justin Yifu, 2013. "Global infrastructure initiative and global recovery," Journal of Policy Modeling, Elsevier, vol. 35(3), pages 400-411.
  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.
  10. 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.
  11. P R Agénor & D Yilmaz, 2006. "The Tyranny of Rules: Fiscal Discipline, Productive Spending, and Growth," Centre for Growth and Business Cycle Research Discussion Paper Series 73, Economics, The Univeristy of Manchester.
  12. 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.
  13. 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.

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