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The Cost of Road Infrastructure in Low- and Middle-Income Countries

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  • Paul Collier
  • Martina Kirchberger
  • Måns Söderbom

Abstract

The connections between transport infrastructure and economic development have been extensively analyzed in previous research, but little is known about the cost of infrastructure investments in poor countries. This paper examines drivers of unit costs of construction and maintenance of transport infrastructure in low- and middle-income countries and documents that: (i) there is a large dispersion in unit costs for comparable road work activities; (ii) after accounting for environmental drivers of costs, residual unit costs are significantly higher in conflict countries; (iii) there is evidence that costs are higher in countries with higher levels of corruption; (iv) these effects are robust to controlling for a country's public investment capacity and business environment. Our findings have implications for governments aiming to increase connectivity in poor countries.

Suggested Citation

  • Paul Collier & Martina Kirchberger & Måns Söderbom, 2016. "The Cost of Road Infrastructure in Low- and Middle-Income Countries," World Bank Economic Review, World Bank Group, vol. 30(3), pages 522-548.
  • Handle: RePEc:oup:wbecrv:v:30:y:2016:i:3:p:522-548.
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    File URL: http://hdl.handle.net/10.1093/wber/lhv037
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    2. Clarete, Ramon L. & Pascua, Gerald Gracius Y., 2018. "The TPP Agreement and Government Procurement: Opportunities and Issues for the Philippines," Philippine Journal of Development PJD 2016 Vol. 43 No. 2d, Philippine Institute for Development Studies.
    3. Martina Viarengo & Martina Kirchberger, 2018. "The role of the construction sector," WIDER Working Paper Series 146, World Institute for Development Economic Research (UNU-WIDER).
    4. Gallego, Jorge & Rivero, Gonzalo & Martínez, Juan, 2021. "Preventing rather than punishing: An early warning model of malfeasance in public procurement," International Journal of Forecasting, Elsevier, vol. 37(1), pages 360-377.
    5. Candice Branchoux & Lin Fang & Yusuke Tateno, 2018. "Estimating Infrastructure Financing Needs in the Asia-Pacific Least Developed Countries, Landlocked Developing Countries, and Small Island Developing States," Economies, MDPI, Open Access Journal, vol. 6(3), pages 1-21, August.
    6. Remi Jedwab & Adam Storeygard, 2017. "The Average and Heterogeneous Effects of Transportation Investments: Evidence from sub-Saharan Africa 1960-2010," Discussion Papers Series, Department of Economics, Tufts University 0822, Department of Economics, Tufts University.
    7. Dias, Lucas & Haddad, Eduardo & Maggi, Andrés, 2020. "Optimal Road Network and the Gains from Intranational Trade," TD NEREUS 15-2020, Núcleo de Economia Regional e Urbana da Universidade de São Paulo (NEREUS).
    8. Remi Jedwab & Adam Storeygard, 2019. "Economic and Political Factors in Infrastructure Investment: Evidence from Railroads and Roads in Africa 1960–2015," Economic History of Developing Regions, Taylor & Francis Journals, vol. 34(2), pages 156-208, May.
    9. Deshmukh, Ranjit & Wu, Grace C. & Callaway, Duncan S. & Phadke, Amol, 2019. "Geospatial and techno-economic analysis of wind and solar resources in India," Renewable Energy, Elsevier, vol. 134(C), pages 947-960.
    10. Fay, Marianne & Martimort, David & Straub, Stéphane, 2021. "Funding and financing infrastructure: The joint-use of public and private finance," Journal of Development Economics, Elsevier, vol. 150(C).
    11. Fazekas, Mihály & Tóth, Bence, 2018. "The extent and cost of corruption in transport infrastructure. New evidence from Europe," Transportation Research Part A: Policy and Practice, Elsevier, vol. 113(C), pages 35-54.
    12. Claudia N. Berg & Uwe Deichmann & Yishen Liu & Harris Selod, 2017. "Transport Policies and Development," Journal of Development Studies, Taylor & Francis Journals, vol. 53(4), pages 465-480, April.
    13. Xiao Wei & Haicheng Xu & Beiqi Zhang & Jianlong Li, 2019. "Infrastructure Operation Efficiency and Influential Factors in Developing Countries: Evidence from China," Sustainability, MDPI, Open Access Journal, vol. 11(3), pages 1-14, January.
    14. Tom Ogwang & Frank Vanclay, 2021. "Resource-Financed Infrastructure: Thoughts on Four Chinese-Financed Projects in Uganda," Sustainability, MDPI, Open Access Journal, vol. 13(6), pages 1-22, March.
    15. Martina Kirchberger, 2018. "The role of the construction sector," WIDER Working Paper Series wp-2018-146, World Institute for Development Economic Research (UNU-WIDER).
    16. Various Authors, 2018. "Philippine Journal of Development 2016, No. 2," Philippine Journal of Development PJD 2016 Vol. 43 No. 2x, Philippine Institute for Development Studies.

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    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • L7 - Industrial Organization - - Industry Studies: Primary Products and Construction
    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • R4 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics

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