Human and physical infrastructure : public investment and pricing policies in developing countries
Almost by definition, the basis for development is infrastructure - whether services for human infrastructure (health, education, nutrition) or physical infrastructure (transport, energy, water). Although the infrastructure sectors are diverse, what they have in common is that public policy has had a great deal to do with how these services are provided and financed in almost all countries. The author reviews the recent literature on two key aspects of that involvement: investment and pricing. While the quality of the econometric evidence varies, recent literature reinforces the view that human and physical infrastructure are critical for economic growth and the reduction of poverty. And the state is recognized as playing a key role in ensuring the efficient, equitable allocation of resources for infrastructure. Despite many sound theoretical reasons for such public involvement, however, recent studies have shown that it leaves much to be desired in efficiency and equity. One symptom is underinvestment in key subsectors that have high economic returns and that help the poor the most, such as primary education and rural health clinics, in relation to more expensive interventions, such as tertiary education and urban hospitals. Another common malaise is the poor use of scarce resources, leading to low quality (students learning little) and reliability (irregular power and water flows), poor maintenance (dilapilated roads), and inappropriate input use (too many school adminstrators or health workers and not enough books or drugs in producing education health outcomes). Just as market failures necessitate government intervention in the infrastructure sectors, so government failures should be considered in deciding the depth and extent of that intervention. The literature has made some advances in diagnosing these problems in poor countries and proposing solutions. But information gaps remain, particularly in developing robust methodologies for: 1) making intersectoral comparisons across the wide range of infrastructure services; 2) crafting more diverse policies about the public-private balance in infrastructure investment, depending on the nature of"public goods"characteristics for various types of infrastructure services, or even across activities for the same service (for example, power transmission versus distribution); and 3) taking issues of political economy into account, such as the vested interests of those with large financial interests in infrastructure. The author also highlights public pricing as a policy initiative that has recently gotten much attention.After briefly reviewing the basic concepts of pricing, he focuses on the literature about pricing reform. Most commonly, the public sector is the main provider of infrastructure services, usually free or at subsidized prices. But the recent literature has aired a rethinking of the balance between public and private financing of infrastructure. The debate in this area is often heated. Health and education are traditionally provided free and some recent literature argues for positive prices, at least for higher tiers of service. The principle of public pricing has been more widely accepted in transport, energy, and to a lesser extent water, but often the levels are too low and do not provide the appropriate incentives for efficient and equitable use.
|Date of creation:||30 Apr 1994|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (202) 477-1234
Web page: http://www.worldbank.org/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Randall P. Ellis & Germano M. Mwabu, 1991.
"The Demand for Outpatient Medical Care in Rural Kenya,"
Boston University - Institute for Economic Development
15, Boston University, Institute for Economic Development.
- Randell P. Ellis & Germano M. Mwabu, 2004. "The Demand for Outpatient Medical Care in Rural Kenya," Boston University - Department of Economics - The Institute for Economic Development Working Papers Series dp-140, Boston University - Department of Economics.
- Randall P. Ellis & Germano M. Mwabu, 1991. "The Demand for Outpatient Medical Care in Rural Kenya," Papers 0006, Boston University - Industry Studies Programme.
- Lewis, Maureen A. & Parker, Clover, 1991. "Policy and implementation of user fees in Jamaican public hospitals," Health Policy, Elsevier, vol. 18(1), pages 57-85, June.
- Eskeland, Gunnar S & Jimenez, Emmanuel, 1992. "Policy Instruments for Pollution Control in Developing Countries," World Bank Research Observer, World Bank Group, vol. 7(2), pages 145-69, July.
- Kaufman, Daniel & Yan Wang, 1992. "How macroeconomic policies affect project performance in the social sectors," Policy Research Working Paper Series 939, The World Bank.
- Heller, Peter S., 1982. "A model of the demand for medical and health services in Peninsular Malaysia," Social Science & Medicine, Elsevier, vol. 16(3), pages 267-284, January.
- Srinivasan, T.N. & Raut, L.K., 1992. "Theories of Long-Run Growth: Old and New," Papers 676, Yale - Economic Growth Center.
- Gary S. Becker & Kevin M. Murphy & Robert F. Tamura, 1990.
"Human Capital, Fertility, and Economic Growth,"
NBER Working Papers
3414, National Bureau of Economic Research, Inc.
- Becker, Gary S & Murphy, Kevin M & Tamura, Robert, 1990. "Human Capital, Fertility, and Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages S12-37, October.
- Gary S. Becker & Kevin M. Murphy & Robert Tamura, 1994. "Human Capital, Fertility, and Economic Growth," NBER Chapters, in: Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education (3rd Edition), pages 323-350 National Bureau of Economic Research, Inc.
- Gary S. Becker & Kevin M. Murphy & Robert Tamura, . "Human Capital, Fertility, and Economic Growth," University of Chicago - Population Research Center 90-5a, Chicago - Population Research Center.
- Hammer, Jeffrey S, 1997.
"Prices and Protocols in Public Health Care,"
World Bank Economic Review,
World Bank Group, vol. 11(3), pages 409-32, September.
- Jimenez, Emmanuel & Paqueo, Vicente & de Vera, Ma. Lourdes, 1988. "Does local financing make primary schools more efficient : the Philippine case," Policy Research Working Paper Series 69, The World Bank.
- Devarajan, Shantayanan & Swaroop, Vinaya & Heng-fu, Zou, 1996.
"The composition of public expenditure and economic growth,"
Journal of Monetary Economics,
Elsevier, vol. 37(2-3), pages 313-344, April.
- Shantayanan Devarajan & Vinaya Swaroop & Heng-fu Zou, 1996. "The composition of public expenditure and economic growth," CEMA Working Papers 77, China Economics and Management Academy, Central University of Finance and Economics.
- Moock, Peter R. & Leslie, Joanne, 1986. "Childhood malnutrition and schooling in the Terai region of Nepal," Journal of Development Economics, Elsevier, vol. 20(1), pages 33-52.
- Chhibber, Ajay & Dailami, Mansoor, 1990. "Fiscal policy and private investment in developing countries : recent evidence on key selected issues," Policy Research Working Paper Series 559, The World Bank.
- Victor Lavy and John M. Quigley., 1991.
"Willingness to Pay for the Quality and Intensity of Medical Care: Evidence from Low Income Households in Ghana,"
Economics Working Papers
91-178, University of California at Berkeley.
- Lavy, Victor & Quigley, John M., 1991. "Willingness to Pay For the Quality and Intensity of Medical Care: Evidence from Low Income Households in Ghana," Berkeley Program on Housing and Urban Policy, Working Paper Series qt8237c6g3, Berkeley Program on Housing and Urban Policy.
- Lavy, Victor & Quigley, John M., 1991. "Willingness to Pay for the Quality and Intensity of Medical Care: Evidence from Low Income Households in Ghana," Department of Economics, Working Paper Series qt4p02g6nq, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
- Jimenez, Emmanuel & Lockheed, Marlaine E & Paqueo, Vicente, 1991. "The Relative Efficiency of Private and Public Schools in Developing Countries," World Bank Research Observer, World Bank Group, vol. 6(2), pages 205-18, July.
- Weale, Martin, 1992. "Education, externalities, fertility, and economic growth," Policy Research Working Paper Series 1039, The World Bank.
- Antle, John M, 1983. "Infrastructure and Aggregate Agricultural Productivity: International Evidence," Economic Development and Cultural Change, University of Chicago Press, vol. 31(3), pages 609-19, April.
- Lewis, Maureen A, 1993. "User Fees in Public Hospitals: Comparison of Three Country Case Studies," Economic Development and Cultural Change, University of Chicago Press, vol. 41(3), pages 513-32, April.
- Lockheed, Marlaine E & Jamison, Dean T & Lau, Lawrence J, 1987. "Farmer Education and Farm Efficiency: Reply," Economic Development and Cultural Change, University of Chicago Press, vol. 35(3), pages 643-44, April.
- Heggie, Ian G. & Fon, Vincy, 1991. "Optimal user charges and cost recovery for roads in developing countries," Policy Research Working Paper Series 780, The World Bank.
When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:1281. 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: (Roula I. Yazigi)
If references are entirely missing, you can add them using this form.