The Economic Effect Of Highway Construction: A Comparative Analysis For The U.K., Germany And Japan

This paper attempts to estimate the marginal productivity of highway construction in the U.K., Germany and Japan during the 15 years following the first oil crisis. In addition, highway†improvement policy in Japan is evaluated using a simple macro†economic regression model. The following conclusions were obtained: in every country the marginal productivity of highway construction decreased over the period 1975†85, with the decrease most pronounced in Japan; subsequently, it increased slowly in the U.K. and Germany, with Japan leveling off though still having the highest value among the three countries; the U.K. maintained a high level of highway productivity largely as a result of a high degree of utilization. There is scope in Japan for attaining a higher level (approximately equal to that of the late 1970s) if the extent of highway utilization can be maintained by additional construction. This implies that future highway†construction policy should be of efficiency†seeking nature.