The History of European Infrastructure Finance: An Analytical Framework

How can socio-economic resources be mobilized to pay for works that offer benefits only in the future, often in the distant future? We discuss what we understand by infrastructure, a term that can have different meanings/semantic contents, and whose definition issues reveal some recurrent conceptual problems. Finance is here understood in the very broad sense of a set of mechanisms bringing to investment, and future benefits, the resources needed in advance to pay for it. We offer a brief discussion of technological and organizational change, as several of our examples and other literature that we cite show that investment and finance decisions are deeply interwoven with knowledge, management, and technical progress. The paper analyses government involvement on both sides of our theme: investment and financing decisions, but also on the wider issue of service provision in the context of emerging widespread social needs. In fact, the social demand for infrastructures often manifests itself as only mediated by governments or a small group of players, while the services offered by the infrastructure have subsequently created general interest, sometimes unexpectedly. We mention the tension between the national and the international dimensions and suggest a taxonomy of the macrotypes of infrastructure financing we have identified, and sums up their spread and evolution over the long term.