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Government quality and the economic returns of transport infrastructure investment in European regions

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  • Crescenzi, Riccardo
  • Di Cataldo, Marco
  • Rodríguez-Pose, Andrés

Abstract

Transport infrastructure investment is a cornerstone of growth-promoting strategies. However, the link between infrastructure investment and economic performance remains unclear. This may be a consequence of overlooking the role of government institutions. This paper assesses the connection between regional quality of government and the returns of different types of road infrastructure in the regions of the European Union. The results unveil the influence of regional quality of government on the economic returns of transport infrastructure. In weak institutional contexts, investment in motorways – the preferred option by governments – yields significantly lower returns than the more humble secondary roads. Government institutions also affect the returns of transport maintenance investment.

Suggested Citation

  • Crescenzi, Riccardo & Di Cataldo, Marco & Rodríguez-Pose, Andrés, 2016. "Government quality and the economic returns of transport infrastructure investment in European regions," LSE Research Online Documents on Economics 65716, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:65716
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    More about this item

    Keywords

    transport infrastructure; public capital investment; economic growth; institutions; government quality; regions; Europe; Seventh Framework Programme; Horizon 2020 Program; 639633-MASSIVE-ERC-2014-STG; 269868;
    All these keywords.

    JEL classification:

    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R40 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - General
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

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