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Have Collapses in Infrastructure Spending Led to Cross-Country Divergence in per Capita GDP?

  • Francisco Rodríguez

    ()

    (Department of Economics, Wesleyan University)

This paper explores whether the post-1980 decline in infrastructure investment in developing countries is a source of growing disparities in world per capita GDP. I start by reviewing the literature on the infrastructure-productivity link, arguing that a balanced reading of previous studies points to a significant effect of infrastructure provision on productivity. I then empirically study whether retrenchments in infrastructure provision have played a role in growing disparities using a data set of country-level infrastructure stocks for 121 countries since 1960. Cutbacks in infrastructure investment appear to be at most a minor cause of growing divergence in per capita incomes.

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File URL: http://repec.wesleyan.edu/pdf/frrodriguez/2006013_rodriguez.pdf
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Paper provided by Wesleyan University, Department of Economics in its series Wesleyan Economics Working Papers with number 2006-013.

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Length: 46 pages
Date of creation: Apr 2006
Handle: RePEc:wes:weswpa:2006-013
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