IDEAS home Printed from https://ideas.repec.org/a/eee/trapol/v74y2019icp93-102.html
   My bibliography  Save this article

The efficiency of transport infrastructure investment and the role of government quality: An empirical analysis

Author

Listed:
  • Kyriacou, Andreas P.
  • Muinelo-Gallo, Leonel
  • Roca-Sagalés, Oriol

Abstract

In this article we analyze the efficiency of total transport investment in a sample of 34 countries over the period 1996 to 2010. We do so by way of Data Envelopment Analysis that evaluates countries according to their ability to achieve the maximum attainable infrastructure quantity and usage for a given investment volume. We find that the Central European countries, New Zealand and Japan are the most efficient when investing in transport infrastructure while the Eastern European countries, Russia, Turkey and Mexico are the least so. We moreover consider the role played by government quality when explaining cross-country differences in investment efficiency, based on truncated panel (and bootstrapped) regressions. We confirm the positive impact of government quality on efficiency even after controlling for a range of potentially confounding variables. Our analysis generates important policy implications for those concerned with the efficiency of transport infrastructure.

Suggested Citation

  • Kyriacou, Andreas P. & Muinelo-Gallo, Leonel & Roca-Sagalés, Oriol, 2019. "The efficiency of transport infrastructure investment and the role of government quality: An empirical analysis," Transport Policy, Elsevier, vol. 74(C), pages 93-102.
  • Handle: RePEc:eee:trapol:v:74:y:2019:i:c:p:93-102
    DOI: 10.1016/j.tranpol.2018.11.017
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0967070X1830372X
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. António Afonso & Ludger Schuknecht & Vito Tanzi, 2010. "Income distribution determinants and public spending efficiency," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 8(3), pages 367-389, September.
    2. Nathan Nunn & Diego Puga, 2012. "Ruggedness: The Blessing of Bad Geography in Africa," The Review of Economics and Statistics, MIT Press, vol. 94(1), pages 20-36, February.
    3. Léopold Simar & Paul W. Wilson, 1998. "Sensitivity Analysis of Efficiency Scores: How to Bootstrap in Nonparametric Frontier Models," Management Science, INFORMS, vol. 44(1), pages 49-61, January.
    4. Andreas P Kyriacou & Oriol Roca-Sagalés, 2012. "The Impact of EU Structural Funds on Regional Disparities within Member States," Environment and Planning C, , vol. 30(2), pages 267-281, April.
    5. Andr�s Rodr�guez-Pose & Enrique Garcilazo, 2015. "Quality of Government and the Returns of Investment: Examining the Impact of Cohesion Expenditure in European Regions," Regional Studies, Taylor & Francis Journals, vol. 49(8), pages 1274-1290, August.
    6. Jorge Martinez-Vazquez & Santiago Lago-Peñas & Agnese Sacchi, 2017. "The Impact Of Fiscal Decentralization: A Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 31(4), pages 1095-1129, September.
    7. Léopold Simar & Paul Wilson, 2011. "Two-stage DEA: caveat emptor," Journal of Productivity Analysis, Springer, vol. 36(2), pages 205-218, October.
    8. Randrianarisoa, Laingo Manitra & Bolduc, Denis & Choo, Yap Yin & Oum, Tae Hoon & Yan, Jia, 2015. "Effects of corruption on efficiency of the European airports," Transportation Research Part A: Policy and Practice, Elsevier, vol. 79(C), pages 65-83.
    9. Karlaftis, Matthew G., 2004. "A DEA approach for evaluating the efficiency and effectiveness of urban transit systems," European Journal of Operational Research, Elsevier, vol. 152(2), pages 354-364, January.
    10. Riccardo Crescenzi & Marco Di Cataldo & Andrés Rodríguez-Pose, 2016. "Government Quality And The Economic Returns Of Transport Infrastructure Investment In European Regions," Journal of Regional Science, Wiley Blackwell, vol. 56(4), pages 555-582, September.
    11. Odeck, James, 2008. "How efficient and productive are road toll companies?: Evidence from Norway," Transport Policy, Elsevier, vol. 15(4), pages 232-241, July.
    12. Andreas Kyriacou & Leonel Muinelo-Gallo & Oriol Roca-Sagalés, 2015. "Construction corrupts: empirical evidence from a panel of 42 countries," Public Choice, Springer, vol. 165(1), pages 123-145, October.
    13. Hauner, David & Kyobe, Annette, 2010. "Determinants of Government Efficiency," World Development, Elsevier, vol. 38(11), pages 1527-1542, November.
    14. Melo, Patricia C. & Graham, Daniel J. & Brage-Ardao, Ruben, 2013. "The productivity of transport infrastructure investment: A meta-analysis of empirical evidence," Regional Science and Urban Economics, Elsevier, vol. 43(5), pages 695-706.
    15. Alberto Alesina & Ekaterina Zhuravskaya, 2011. "Segregation and the Quality of Government in a Cross Section of Countries," American Economic Review, American Economic Association, vol. 101(5), pages 1872-1911, August.
    16. Riccardo Crescenzi & Andrés Rodríguez-Pose, 2012. "Infrastructure and regional growth in the European Union," Papers in Regional Science, Wiley Blackwell, vol. 91(3), pages 487-513, August.
    17. Ward Romp & Jakob De Haan, 2007. "Public Capital and Economic Growth: A Critical Survey," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 8(S1), pages 6-52, April.
    18. Adler, Nicole & Berechman, Joseph, 2001. "Measuring airport quality from the airlines' viewpoint: an application of data envelopment analysis," Transport Policy, Elsevier, vol. 8(3), pages 171-181, July.
    19. Olsson, Ola & Hansson, Gustav, 2011. "Country size and the rule of law: Resuscitating Montesquieu," European Economic Review, Elsevier, vol. 55(5), pages 613-629, June.
    20. Caulfield, Brian & Bailey, Diarmuid & Mullarkey, Shane, 2013. "Using data envelopment analysis as a public transport project appraisal tool," Transport Policy, Elsevier, vol. 29(C), pages 74-85.
    21. Andreas P Kyriacou & Oriol Roca-Sagalés, 2011. "Fiscal and Political Decentralization and Government Quality," Environment and Planning C, , vol. 29(2), pages 204-223, April.
    22. Francesco Grigoli & Zachary Mills, 2014. "Institutions and public investment: an empirical analysis," Economics of Governance, Springer, vol. 15(2), pages 131-153, May.
    23. Joanna Wolszczak-Derlacz & Aleksandra Parteka, 2011. "Efficiency of European public higher education institutions: a two-stage multicountry approach," Scientometrics, Springer;Akadémiai Kiadó, vol. 89(3), pages 887-917, December.
    24. Odeck, James, 2009. "Statistical precision of DEA and Malmquist indices: A bootstrap application to Norwegian grain producers," Omega, Elsevier, vol. 37(5), pages 1007-1017, October.
    25. Tai–Hsin Huang & Mei–Hui Wang, 2002. "Comparison of Economic Efficiency Estimation Methods: Parametric and Non–parametric Techniques," Manchester School, University of Manchester, vol. 70(5), pages 682-709, September.
    26. Gupta, Sanjeev & Kangur, Alvar & Papageorgiou, Chris & Wane, Abdoul, 2014. "Efficiency-Adjusted Public Capital and Growth," World Development, Elsevier, vol. 57(C), pages 164-178.
    27. Marchetti, Dalmo & Wanke, Peter, 2017. "Brazil's rail freight transport: Efficiency analysis using two-stage DEA and cluster-driven public policies," Socio-Economic Planning Sciences, Elsevier, vol. 59(C), pages 26-42.
    28. Luis R. Murillo-Zamorano, 2004. "Economic Efficiency and Frontier Techniques," Journal of Economic Surveys, Wiley Blackwell, vol. 18(1), pages 33-77, February.
    29. McDonald, John, 2009. "Using least squares and tobit in second stage DEA efficiency analyses," European Journal of Operational Research, Elsevier, vol. 197(2), pages 792-798, September.
    30. Kaufmann, Daniel & Kraay, Aart & Mastruzzi, Massimo, 2010. "The worldwide governance indicators : methodology and analytical issues," Policy Research Working Paper Series 5430, The World Bank.
    31. Fisman, Ray & Golden, Miriam A., 2017. "Corruption: What Everyone Needs to Know," OUP Catalogue, Oxford University Press, number 9780190463977.
    32. Laura Langbein & Stephen Knack, 2010. "The Worldwide Governance Indicators: Six, One, or None?," Journal of Development Studies, Taylor & Francis Journals, vol. 46(2), pages 350-370.
    33. Bruce Hollingsworth & John Wildman, 2003. "The efficiency of health production: re‐estimating the WHO panel data using parametric and non‐parametric approaches to provide additional information," Health Economics, John Wiley & Sons, Ltd., vol. 12(6), pages 493-504, June.
    34. H. Fried & C. Lovell & S. Schmidt & S. Yaisawarng, 2002. "Accounting for Environmental Effects and Statistical Noise in Data Envelopment Analysis," Journal of Productivity Analysis, Springer, vol. 17(1), pages 157-174, January.
    35. Stephen Knack & Omar Azfar, 2003. "Trade intensity, country size and corruption," Economics of Governance, Springer, vol. 4(1), pages 1-18, April.
    36. Pedro R.D. Bom & Jenny E. Ligthart, 2014. "What Have We Learned From Three Decades Of Research On The Productivity Of Public Capital?," Journal of Economic Surveys, Wiley Blackwell, vol. 28(5), pages 889-916, December.
    37. Alberto Alesina & Reza Baqir & William Easterly, 1999. "Public Goods and Ethnic Divisions," The Quarterly Journal of Economics, Oxford University Press, vol. 114(4), pages 1243-1284.
    38. Charnes, A. & Cooper, W. W. & Rhodes, E., 1978. "Measuring the efficiency of decision making units," European Journal of Operational Research, Elsevier, vol. 2(6), pages 429-444, November.
    39. António Afonso & Alma Romero & Emma Monsalve, 2013. "Public sector efficiency: evidence for Latin America," Working Papers Department of Economics 2013/20, ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa.
    40. Kyriacou, Andreas P. & Roca-Sagalés, Oriol, 2011. "Fiscal decentralization and government quality in the OECD," Economics Letters, Elsevier, vol. 111(3), pages 191-193, June.
    41. Simar, Leopold & Wilson, Paul W., 2007. "Estimation and inference in two-stage, semi-parametric models of production processes," Journal of Econometrics, Elsevier, vol. 136(1), pages 31-64, January.
    42. Yan, Jia & Oum, Tae Hoon, 2014. "The effect of government corruption on the efficiency of US commercial airports," Journal of Urban Economics, Elsevier, vol. 80(C), pages 119-132.
    43. Coelli, Tim & Perelman, Sergio, 1999. "A comparison of parametric and non-parametric distance functions: With application to European railways," European Journal of Operational Research, Elsevier, vol. 117(2), pages 326-339, September.
    44. Andreas Kyriacou, 2012. "Ethnic segregation and the quality of government: the importance of regional diversity," Constitutional Political Economy, Springer, vol. 23(2), pages 166-180, June.
    45. Crescenzi, Riccardo & Rodríguez-Pose, Andrés, 2008. "Infrastructure endowment and investment as determinants of regional growth in the European Union," LSE Research Online Documents on Economics 23323, London School of Economics and Political Science, LSE Library.
    46. Julian Donaubauer & Birgit E. Meyer & Peter Nunnenkamp, 2016. "A New Global Index of Infrastructure: Construction, Rankings and Applications," The World Economy, Wiley Blackwell, vol. 39(2), pages 236-259, February.
    47. repec:idb:brikps:80478 is not listed on IDEAS
    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


    Cited by:

    1. Xiongbin Lin & Ian MacLachlan & Ting Ren & Feiyang Sun, 2019. "Quantifying economic effects of transportation investment considering spatiotemporal heterogeneity in China: a spatial panel data model perspective," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 63(3), pages 437-459, December.
    2. Qiongzhi Liu & Chan Luo, 2019. "The Impact of Government Integrity on Investment Efficiency in Regional Transportation Infrastructure in China," Sustainability, MDPI, Open Access Journal, vol. 11(23), pages 1-13, November.

    More about this item

    Keywords

    Transport infrastructure; Efficiency; Data envelopment analysis; Panel data; Government quality;

    JEL classification:

    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:trapol:v:74:y:2019:i:c:p:93-102. 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: (Haili He). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/30473/description#description .

    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 CitEc recognized a reference but did not link an item in RePEc 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.