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Infrastructure and economic growth in East Asia

  • Straub, Stephane
  • Vellutini, Charles
  • Warlters, Michael

This paper examines whether infrastructure investment has contributed to East Asia's economic growth using both a growth accounting framework and cross-country regressions. For most of the variables used, both the growth accounting exercise and cross-country regressions fail to find a significant link between infrastructure, productivity and growth. These conclusions contrast strongly with previous studies finding positive and significant effect for all infrastructure variables in the context of a production function study. This leads us to conclude that results from studies using macro-level data should be considered with extreme caution. The Authors suggest that infrastructure investment may have had the primary function of relieving constraints and bottlenecks as they arose, as opposed to directly encouraging growth.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 4589.

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Date of creation: 01 Apr 2008
Date of revision:
Handle: RePEc:wbk:wbrwps:4589
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  1. Seethepalli, Kalpana & Bramati, Maria Caterina & Veredas, David, 2008. "How relevant is infrastructure to growth in East Asia ?," Policy Research Working Paper Series 4597, The World Bank.
  2. Robert J. Barro & Jong-Wha Lee, 2000. "International Data on Educational Attainment: Updates and Implications," CID Working Papers 42, Center for International Development at Harvard University.
  3. Canning, David, 1999. "Infrastructure's contribution to aggregate output," Policy Research Working Paper Series 2246, The World Bank.
  4. Stephane Straub, 2011. "Infrastructure and Development: A Critical Appraisal of the Macro-level Literature," Journal of Development Studies, Taylor & Francis Journals, vol. 47(5), pages 683-708.
  5. Estache, Antonio & Goicoechea, Ana, 2005. "A"research"database on infrastructure economic performance," Policy Research Working Paper Series 3643, The World Bank.
  6. Temple, Jonathan, 2000. "Growth Regressions and What the Textbooks Don't Tell You," Bulletin of Economic Research, Wiley Blackwell, vol. 52(3), pages 181-205, July.
  7. Jacoby, Hanan G., 1998. "Access to markets and the benefits of rural roads," Policy Research Working Paper Series 2028, The World Bank.
  8. Gibson, John & Rozelle, Scott, 2003. "Poverty and Access to Roads in Papua New Guinea," Economic Development and Cultural Change, University of Chicago Press, vol. 52(1), pages 159-85, October.
  9. Luis Serven & César Calderon, 2004. "The Effects of Infrastructure Development on Growth and income," Econometric Society 2004 Latin American Meetings 173, Econometric Society.
  10. Holtz-Eakin, Douglas, 1994. "Public-Sector Capital and the Productivity Puzzle," The Review of Economics and Statistics, MIT Press, vol. 76(1), pages 12-21, February.
  11. Henderson, J. Vernon & Shalizi, Zmarak & Venables, Anthony J., 2000. "Geography and development," Policy Research Working Paper Series 2456, The World Bank.
  12. Henderson, J. Vernon, 2005. "Urbanization and Growth," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 24, pages 1543-1591 Elsevier.
  13. 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, 04.
  14. Canning, David, 1998. "A database of world infrastructure stocks, 1950-95," Policy Research Working Paper Series 1929, The World Bank.
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