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Infrastructure and growth in Africa

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  • Calderon, Cesar

Abstract

The goal of the paper is to provide a comprehensive assessment of the impact of infrastructure development on growth in African countries. Based on econometric estimates for a sample of 136 countries from 1960-2005, the authors evaluate the impact on per capita growth of faster accumulation of infrastructure stocks and of enhancement in the quality of infrastructure services for 39 African countries in three key infrastructure sectors: telecommunications, electricity, and roads. Using an econometric technique suitable for dynamic panel data models and likely endogenous regressors, the authors find that infrastructure stocks and service quality boost economic growth. The growth payoff of reaching the infrastructure development of the African leader (Mauritius) is 1.1 percent of GDP per year in North Africa and 2.3 percent in Sub-Saharan Africa, with most of the contribution coming from more, rather than better, infrastructure. Across Africa, infrastructure contributed 99 basis points to per capita economic growth, versus 68 points for other structural policies. Most of the contribution came from increases in stocks (89 basis points), versus quality improvements (10 basis points). The findings show that growth is positively affected by the volume of infrastructure stocks and the quality of infrastructure services; simulations show that our empirical findings are significant statistically and economically. Identifying areas of opportunity to generate productivity growth, the authors find that African countries are likely to gain more from larger stocks of infrastructure than from enhancements in the quality of existing infrastructure. The payoffs are largest for telephone density, electricity-generating capacity, road-network length, and road quality.

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  • Calderon, Cesar, 2009. "Infrastructure and growth in Africa," Policy Research Working Paper Series 4914, The World Bank.
  • Handle: RePEc:wbk:wbrwps:4914
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    Cited by:

    1. Sébastien Dessus & Jose L. Diaz‐Sanchez & Aristomene Varoudakis, 2016. "Fiscal Rules and the Pro‐cyclicality of Public Investment in the West African Economic and Monetary Union," Journal of International Development, John Wiley & Sons, Ltd., vol. 28(6), pages 887-901, August.
    2. Ioannis N. Kessides, 2012. "Regionalising Infrastructure for Deepening Market Integration: The Case of East Africa," Journal of Infrastructure Development, India Development Foundation, vol. 4(2), pages 115-138, December.
    3. Fosu, Augustin Kwasi & Getachew, Yoseph Yilma & Ziesemer, Thomas H.W., 2016. "Optimal Public Investment, Growth, And Consumption: Evidence From African Countries," Macroeconomic Dynamics, Cambridge University Press, vol. 20(8), pages 1957-1986, December.
    4. Campiglio, Emanuele, 2014. "The structural shift to green services: A two-sector growth model with public capital and open-access resources," Structural Change and Economic Dynamics, Elsevier, vol. 30(C), pages 148-161.
    5. Bah, El-hadj & Fang, Lei, 2015. "Impact of the business environment on output and productivity in Africa," Journal of Development Economics, Elsevier, vol. 114(C), pages 159-171.
    6. Nakhoda, Aadil, 2014. "The impact of electricity constraints on access to finance: A firm-level study," MPRA Paper 59507, University Library of Munich, Germany.
    7. Cattaneo, Andrea & Sadiddin, Ahmad & Bertini, Raffaele, 2017. "A Global Perspective on Development Paths for Inclusive Rural Transformation," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258193, Agricultural and Applied Economics Association.
    8. El-Hadj Bah & Lei Fang, 2015. "Working Paper - 219 - Impact of the business Environment on Output and Productivity in Africa," Working Paper Series 2159, African Development Bank.
    9. Abubakar Mammadi & Hussaini Alhassan Funtua & Usman Alhaji Muktar & Bala Jibrin, 2021. "Impact of Facilities and Service Quality on Patient Relatives Satisfaction and Patronage in University of Maiduguri Teaching Hospital, Borno State, Nigeria," Traektoriâ Nauki = Path of Science, Altezoro, s.r.o. & Dialog, vol. 7(03), pages 3001-3011, March.
    10. Suchi Malhotra & Howard White & Nina de la Cruz & Ashrita Saran & John Eyers & Denny John & Ella Beveridge & Nina Blöndal, 2021. "PROTOCOL: Evidence and gap map: studies of the effectiveness of transport sector interventions in low‐ and middle‐income countries," Campbell Systematic Reviews, John Wiley & Sons, vol. 17(1), March.
    11. Machokoto, Michael & Mahonye, Nyasha & Makate, Marshall, 2022. "Short-term financing sources in Africa: Substitutes or complements?," Research in International Business and Finance, Elsevier, vol. 60(C).
    12. Yi Yang & Beibei Liu & Peng Wang & Wei‐Qiang Chen & Timothy M. Smith, 2020. "Toward sustainable climate change adaptation," Journal of Industrial Ecology, Yale University, vol. 24(2), pages 318-330, April.
    13. Rafael Aguirre Unceta, 2018. "Niger : la Quête du Développement dans un Contexte Adverse," Working Papers hal-02046108, HAL.
    14. Inderst, Georg & Stewart, Fiona, 2014. "Institutional Investment in Infrastructure in Emerging Markets and Developing Economies," MPRA Paper 62522, University Library of Munich, Germany.
    15. International Monetary Fund, 2011. "Zambia: Ex Post Assessment of Longer-Term Program Engagement: Update," IMF Staff Country Reports 2011/197, International Monetary Fund.
    16. Jon Unruh & Matthew Pritchard & Emily Savage & Chris Wade & Priya Nair & Ammar Adenwala & Lowan Lee & Max Malloy & Irmak Taner & Mads Frilander, 2019. "Linkages Between Large-scale Infrastructure Development and Conflict Dynamics in East Africa," Journal of Infrastructure Development, India Development Foundation, vol. 11(1-2), pages 1-13, June.
    17. Chakamera, Chengete & Alagidede, Paul, 2018. "Electricity crisis and the effect of CO2 emissions on infrastructure-growth nexus in Sub Saharan Africa," Renewable and Sustainable Energy Reviews, Elsevier, vol. 94(C), pages 945-958.
    18. Suchi Kapoor Malhotra & Howard White & Nina Ashley O. Dela Cruz & Ashrita Saran & John Eyers & Denny John & Ella Beveridge & Nina Blöndal, 2021. "Studies of the effectiveness of transport sector interventions in low‐ and middle‐income countries: An evidence and gap map," Campbell Systematic Reviews, John Wiley & Sons, vol. 17(4), December.
    19. Rafael AGUIRRE UNCETA, 2018. "Niger : la Quête du Développement dans un Contexte Adverse," Working Papers P247, FERDI.

    More about this item

    Keywords

    Transport Economics Policy&Planning; Infrastructure Economics; E-Business; Private Participation in Infrastructure; Non Bank Financial Institutions;
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