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One model fits all? Determinants of transport costs across sectors and country groups

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  • Schürenberg-Frosch, Hannah
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    Abstract

    We show with the aid of pooled OLS estimations that investments in improved road infrastructure have the potential to signi cantly reduce transport costs. However, this result can only be clearly con rmed for industrial countries and is of primary importance for production and transportation of agricultural goods. For developing and transition countries we fi nd other determinants such as weather conditions to be more important in determining transport costs. A key variable, especially in these countries, is corruption. At very high levels corruption has the potential to prevent positive effects from roads on transport costs or to even reverse them. This paper contributes to the literature on infrastructure investment by introducing and applying an internationally comparable measure of transport costs which can be calculated for a large and growing number of countries. We isolate important determinants of transport costs and provide insights into international and sectoral differences concerning the impact of roads on transport costs. We conclude that investment in transport infrastructure can have substantial positive effects especially on agricultural production and the efficient marketing of agricultural products but only if speci c conditions are in place. --

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    Bibliographic Info

    Paper provided by University of Goettingen, Department of Economics in its series Center for European, Governance and Economic Development Research Discussion Papers with number 122.

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    Date of creation: 2011
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    Handle: RePEc:zbw:cegedp:122

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    Postal: Platz der Göttinger Sieben 3, 37073 Göttingen
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    Related research

    Keywords: Infrastructure; Transport networks; Transport costs; Agriculture; public investment; development;

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    1. Jenks, Leland H., 1944. "Railroads as an Economic Force in American Development," The Journal of Economic History, Cambridge University Press, vol. 4(01), pages 1-20, May.
    2. Fremdling, Rainer, 1977. "Railroads and German Economic Growth: A Leading Sector Analysis with a Comparison to the United States and Great Britain," The Journal of Economic History, Cambridge University Press, vol. 37(03), pages 583-604, September.
    3. Fan, Shenggen, 2008. "Public expenditures, growth, and poverty in developing countries: Lessons from developing countries," Issue briefs 51, International Food Policy Research Institute (IFPRI).
    4. Ram, Rati, 1996. "Productivity of public and private investment in developing countries: A broad international perspective," World Development, Elsevier, vol. 24(8), pages 1373-1378, August.
    5. Javier Escobal & Carmen Ponce, 2003. "The benefits of rural roads. Enhancing income opportunities for the rural poor," Documentos de Investigación dt40b, Grupo de Análisis para el Desarrollo (GRADE).
    6. Aschauer, David Alan, 1989. "Is public expenditure productive?," Journal of Monetary Economics, Elsevier, vol. 23(2), pages 177-200, March.
    7. Fay, Marianne & Yepes, Tito, 2003. "Investing in infrastructure : what is needed from 2000 to 2010?," Policy Research Working Paper Series 3102, The World Bank.
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