Public Infrastructure and Growth: New Channels and Policy Implications

This paper provides an overview of the various channels through which public infrastructure may affect growth. In addition to the conventional productivity, complementarity, and crowding-out effects typically emphasized in the literature, the impact of infrastructure on investment adjustment costs,...

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Bibliographic Details
Main Authors:	Agénor, Pierre-Richard, Moreno-Dodson, Blanca
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2012
Subjects:	ACCELERATOR ACCELERATOR EFFECT ACCESS TO INFORMATION ACCESSIBILITY ADVERSE EFFECT AGGREGATE DEMAND AIR AIR POLLUTION BASIC INFRASTRUCTURE CAPITAL MARKETS CLINICS CONGESTION CONGESTION COSTS CONGESTION ON HIGHWAYS CONSTANT RETURNS TO SCALE COST FUNCTIONS COST OF CAPITAL DEATH RATE DEBT DEFICITS DEPRECIATION DEVELOPMENT ECONOMICS DIMINISHING RETURNS DOMESTIC CONSUMPTION ECONOMIC GROWTH ELASTICITY ELASTICITY OF SUBSTITUTION ELECTRICITY EMPLOYMENT EVASION EXPANSION EXPORTS EXTERNALITIES FAMILIES FIRMS FOREIGN MARKETS FORMAL ANALYSIS FREIGHT FUELS GDP GOVERNMENT DEBT GOVERNMENT SPENDING GROWTH RATE HEALTH CARE HEALTH INDICATORS HEALTH INTERVENTIONS HEALTH OUTCOMES HEALTH SERVICES HIGHWAY HOSPITALS HUMAN CAPITAL HYGIENE INCOME INFLATION INFRASTRUCTURE INVESTMENT INTEREST RATE INTEREST RATES LIFE EXPECTANCY MACROECONOMICS MARGINAL COST MARGINAL PRODUCT MARGINAL PRODUCTIVITY MORBIDITY MORTALITY NUTRITION NUTRITIONAL STATUS OPEN ECONOMY POLIO POLITICAL ECONOMY PRICE EFFECT PRIMARY HEALTH CARE PRIVATE CAPITAL PRIVATE INVESTMENT PRIVATE INVESTORS PRIVATE SECTOR PRODUCTION COSTS PRODUCTION FUNCTION PRODUCTION INPUTS PRODUCTIVITY PROPERTY RIGHTS PUBLIC PUBLIC BORROWING PUBLIC DEBT PUBLIC EXPENDITURE PUBLIC INFRASTRUCTURE PUBLIC INVESTMENT PUBLIC INVESTMENT IN INFRASTRUCTURE PUBLIC ROADS PUBLIC SECTOR PUBLIC SPENDING PUBLIC TRANSPORTATION PUBLIC WORKS PUBLIC-PRIVATE PARTNERSHIPS RAILROAD RAILWAYS RISK PREMIUM ROAD ROAD CONDITIONS ROAD INFRASTRUCTURE ROAD MAINTENANCE ROAD NETWORK ROADS RURAL ROADS SANITATION SANITATION FACILITIES SCALE EFFECT SCHOOL HEALTH SIBLINGS SMALL FIRMS SUB-SAHARAN AFRICA SUBSTITUTION EFFECT SUPPLY CURVE TAX TAX RATES TAX REVENUES TAXATION TELECOMMUNICATIONS TOLL TOTAL FACTOR PRODUCTIVITY TOTAL FACTOR PRODUCTIVITY GROWTH TRAFFIC TRANSPORT TRANSPORT COSTS TRANSPORT FACILITIES TRANSPORTATION TRANSPORTATION NETWORKS TRANSPORTATION SERVICES TRANSPORTATION SUBSIDIES TRANSPORTATION SYSTEM TRUCKS VACCINATION VEHICLE VEHICLE OPERATING VEHICLE OPERATING COSTS WAGES WATER SUPPLY WATER SYSTEMS WEALTH WORKERS
Online Access:	http://documents.worldbank.org/curated/en/2006/11/7188045/public-infrastructure-growth-new-channels-policy-implications http://hdl.handle.net/10986/8880

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Summary:	This paper provides an overview of the various channels through which public infrastructure may affect growth. In addition to the conventional productivity, complementarity, and crowding-out effects typically emphasized in the literature, the impact of infrastructure on investment adjustment costs, the durability of private capital, and the production of health and education services are also highlighted. Effects on health and education are well documented in a number of microeconomic studies, but macroeconomists have only recently begun to study their implications for growth. Links between health, infrastructure, and growth are illustrated in an endogenous growth model with transitional dynamics, and the optimal allocation of public expenditure is discussed. The concluding section draws implications of the analysis for the design of strategies aimed at promoting growth and reducing poverty.

Public Infrastructure and Growth: New Channels and Policy Implications

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