Download Free Public Capital Infrastructure And Industrial Development Book in PDF and EPUB Free Download. You can read online Public Capital Infrastructure And Industrial Development and write the review.

This paper sheds light on how important public capital is for countries trying to industrialize and achieve faster economic growth. To this end, a small empirical model of industrial development is formulated and applied to manufacturing level and growth data for 57 advanced and developing countries for the time period of 1970 to 2000. In estimating the impact of public capital on industry special care is taken to deal with country-specific effects, reverse causality and endogeneity bias. The findings are clear: public capital has important explanatory power for why some countries have managed to industrialize, while others have not. Stages of development influence how strongly public capital matters, but there is evidence of impact at all income levels. Moreover, it seems that the returns to public investment are, largely, diminishing as income increases. A second key conclusion is that growth of public capital not only explains long-term levels of industry, but also how rapidly industry grows. Interestingly, the largest impact occurs for the fastest growing countries, i.e., the Asian tiger economies, and the High-income ones. Based on rates of return on public capital calculations, little support is found for the notion that public infrastructure is overprovided in developing countries. To the contrary, the rate of return on public capital is positive at all stages of development, although higher for the countries least endowed with such capital and those growing at the fastest rate.
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).
Abstract: 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.
"Policy-makers often call for expanding public spending on infrastructure, which includes a broad range of investments from roads and bridges to digital networks that will expand access to high-speed broadband. Some point to near-term macro-economic benefits and job creation, others focus on long-term effects on productivity and economic growth. This volume explores the links between infrastructure spending and economic outcomes, as well as key economic issues in the funding and management of infrastructure projects. It draws together research studies that describe the short-run stimulus effects of infrastructure spending, develop new estimates of the stock of U.S. infrastructure capital, and explore the incentive aspects of public-private partnerships (PPPs). A salient issue is the treatment of risk in evaluating publicly-funded infrastructure projects and in connection with PPPs. The goal of the volume is to provide a reference for researchers seeking to expand research on infrastructure issues, and for policy-makers tasked with determining the appropriate level of infrastructure spending"--
This paper reviews the linkages between infrastructure and economic development based on both formal empirical research and informal case studies. The main thesis is that economic benefits result from investments in infrastructure only to the extent that they generate a sustainable flow of services valued by consumers. Thus, an analysis of infrastructures' contributions to growth must look at the impacts of services as actually perceived, not at indirect indicators that measure only aggregate provision of infrastructure capital. The paper notes that macro and industry level research , although having its limitations, suggest a positive and statistically significant relationship between infrastructure and economic output. However the conclusions derived from this research (most of which derives from developed countries) provide little specific guidance for policy. To gain more practical insights about how infrastructure contributes to economic growth and to improved quality of life, and to understand the welfare costs of inadequate or unreliable infrastructure, it is necessary to look at microeconomic evidence. Particularly interesting illustrations of these relationships are to be found in developing countries where there is wide variance in the availability and quality of infrastructure.
Laying a solid foundation of economic facts and ideas, this book provides a comprehensive look at the critical role of public capital in development.