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This research project followed an earlier similar project on Nigeria, applying the same methods. A sample of manufacturers was surveyed to document their responses to infrastructure deficiencies in electricity, water, transport, telecommunications, and waste disposal. They found the manufacturers undertook significant expenditures to offset deficiencies in publicly provided infrastructure services, and that changing public policy toward privately supplied infrastructure and changing the pricing of public infrastructure could yield significant savings in social costs. Thailand and Indonesia have made significant strides in following the policies for private sector participation in infrastructure provision. Nigeria, where public infrastructure monopolies still dominate, lags behind, yet stands to benefit most from such policy reform. Government policy toward the industrial organization and pricing of infrastructure sectors can significantly help a developing economy realize the benefits of private sector participation in the provision of infrastructure services.
The book examines the complex relationships between infrastructure and the rest of the economy. In particular, it focuses on the contentious issue of whether infrastructure investments stimulate productivity growth, issues of pricing and ownership, and also development problems such as environmental damage. Methods range from traditional production function models and compensating variation approaches to nonlinear methods of dynamic analysis. There is a unique emphasis on the ability of these different methods to allow for the complex interdependencies involved. Six of the fifteen papers deal with these methodological aspects, whereas the remainder addresses specific cases or examples in a variety of countries (Europe, USA and developing countries).
World Development Report 1994 examines the link between infrastructure and development and explores ways in which developing countries can improve both the provision and the quality of infrastructure services. In recent decades, developing countries have made substantial investments in infrastructure, achieving dramatic gains for households and producers by expanding their access to services such as safe water, sanitation, electric power, telecommunications, and transport. Even more infrastructure investment and expansion are needed in order to extend the reach of services - especially to people living in rural areas and to the poor. But as this report shows, the quantity of investment cannot be the exclusive focus of policy. Improving the quality of infrastructure service also is vital. Both quantity and quality improvements are essential to modernize and diversify production, help countries compete internationally, and accommodate rapid urbanization. The report identifies the basic cause of poor past performance as inadequate institutional incentives for improving the provision of infrastructure. To promote more efficient and responsive service delivery, incentives need to be changed through commercial management, competition, and user involvement. Several trends are helping to improve the performance of infrastructure. First, innovation in technology and in the regulatory management of markets makes more diversity possible in the supply of services. Second, an evaluation of the role of government is leading to a shift from direct government provision of services to increasing private sector provision and recent experience in many countries with public-private partnerships is highlighting new ways to increase efficiency and expand services. Third, increased concern about social and environmental sustainability has heightened public interest in infrastructure design and performance.
May 1996 Using a model of aid fungibility, the authors examine the relationship between foreign aid and public spending. Based on a panel of cross-country and time-series data, their results show that roughly 75 cents of every dollar given in net development assistance goes to current spending and 25 cents to capital spending in the recipient countries. But concessionary loans - a component of development assistance - stimulate far more government spending. Their results also show that aid increases both public and private investment. To test aid fungibility across both public spending categories, they use a newly constructed data series on the net disbursement of concessionary loans. They find that concessionary loans given to the transport and communication sector are fully nonfungible. But loans to the energy sector are converted into fungible monies and part of the funds leak into transport and communications. Loans to agriculture and education are also fungible. There is no evidence of concessionary funds being diverted for military purposes. Their results show that total public spending in the health sector has no impact on reducing infant mortality, but concessionary loans to the health sector do. This finding leads the authors to conclude that linking foreign aid to an agreed-upon public spending program in areas critical to development might be an effective way to transfer resources to developing countries.
The focus of this book is on industrial infrastructures of production and circulation, from power distribution and roads to dry ports and airports. It looks at how these infrastructures underpin visions of progress and mediate relations between the state and capitalist firms in industrializing districts in Punjab, Pakistan.