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How relevant is infrastructure to growth in East Asia ?

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  • Seethepalli, Kalpana
  • Bramati, Maria Caterina
  • Veredas, David

Abstract

This paper seeks to shed some light on the extent to which infrastructure sub-sectors - energy, telecommunications, water supply, sanitation, and transport - contributed to growth in East Asia during 1985-2004. It also attempts to provide additional insights on whether the relationship between infrastructure and growth depends on five additional variables: the degree of private participation in infrastructure, the quality of governance, the extent of rural-urban inequality in access to infrastructure services, country income levels, as well as geography. The findings show that greater stocks of infrastructure were indeed associated with higher growth. However, a more nuanced look at the sensitivity of infrastructure impacts on the five additional variables yields different results, with some sectors supporting conventional expectations and others yielding mixed or counter-intuitive results. In particular, the telecom and sanitation sectors yield statistically significant results supporting the a priori hypotheses; electricity and water infrastructure provide mixed results; and road infrastructure consistently contradicts a priori expectations. The results are consistent with the widely-accepted idea in policy research that infrastructure plays an important role in promoting growth, as well as with the viewpoint that certain countries'endowments influence the growth-related impacts of infrastructure.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 4597.

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Date of creation: 01 Apr 2008
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Handle: RePEc:wbk:wbrwps:4597

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Keywords: Transport Economics Policy&Planning; Governance Indicators; Banks&Banking Reform; Urban Slums Upgrading; Urban Services to the Poor;

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Citations

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Cited by:
  1. Eric Manes, 2009. "Pakistan's Investment Climate : Laying the Foundation for Growth, Volume 2. Annexes," World Bank Other Operational Studies 12411, The World Bank.
  2. Straub, Stephane & Vellutini, Charles & Warlters, Michael, 2008. "Infrastructure and economic growth in East Asia," Policy Research Working Paper Series 4589, The World Bank.
  3. Mary Modupe Fasoranti, 2012. "The Effect of Government Expenditure on Infrastructure on the Growth of the Nigerian Economy, 1977-2009," International Journal of Economics and Financial Issues, Econjournals, vol. 2(4), pages 513-518.

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