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The paper investigates empirically the determinants of economic growth for a large sample of sub-Saharan African countries during 1981-92. The results indicate that (i) an increase in private investment has a relatively large positive impact on per capita growth; (ii) growth is stimulated by public policies that lower the budget deficit in relation to GDP (without reducing government investment), reduce the rate of inflation, maintain external competitiveness, promote structural reforms, encourage human capital development, and slow population growth; and (iii) convergence of per capita income occurs after controlling for human capital development and public policies.
"Empirical explorations of the growth and productivity impacts of infrastructure have been characterized by ambiguous (countervailing signs) results with little robustness. A number of explanations of the contradictory findings have been proposed. These range from the crowd-out of private by public sector investment, non-linearities generating the possibility of infrastructure overprovision, simultaneity between infrastructure provision and growth, and the possibility of multiple (hence indirect) channels of influence between infrastructure and productivity improvements. The authors explore these possibilities using panel data for South Africa over the 1970-2000 period, and a range of 19 infrastructure measures. Using a number of alternative measures of productivity, the prevalence of ambiguous (countervailing signs) results, with little systematic pattern is also shown to hold for their data set in estimations that include the infrastructure measures in simple growth frameworks. The authors demonstrate that controlling for potential endogeneity of infrastructure in estimation robustly eliminates virtually all evidence of ambiguous impacts of infrastructure, due for example to possible overinvestment in infrastructure. Controlling for the possibility of endogeneity in the infrastructure measures renders the impact of infrastructure capital not only positive, but of economically meaningful magnitudes. These findings are invariant between the direct impact of infrastructure on labor productivity, and the indirect impact of infrastructure on total factor productivity."--World Bank web site.
Evaluates the role of infrastructure in promoting economic growth and poverty reduction in Africa. Examines complementary physical infrastructure: telecommunications, power, transport (roads, railways, ports and airports) and water supply. Explores Africa's infrastructure endowment and financing options.
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.
Good infrastructure is essential for socio-economic growth and sustainable development. Safe and accessible water supplies, reliable energy, good transport networks and communications technology are all vital to a region’s development agenda. This book presents a comprehensive exploration of the state of infrastructure in Africa and provides an integrated analysis of the challenges the sector faces, based on extensive fieldwork across the continent. Contributors with a wide range of expertise challenge current policy, practice and thinking on issues including the politics of infrastructure development, social inclusion, domestic resource mobilisation and infrastructure financing. The book will be an important resource for academic researchers, students and early career development professionals as well as policymakers and NGOs engaged in dialoguing the infrastructure development options for Africa.
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.
This edited volume explores and dissects Africa's economic growth and sustainable development using an optimal conceptual model of the progressive continent's development up to and until 2030. Africa is studied not against the background of developed (OECD) and leading developing (e.g. BRICS) countries, but as a separate economy and as a self-sufficient region which follows its own priorities, and implements its own unique opportunities and vectors of growth and development. This volume addresses the contemporary and topical issues of inclusive growth, digital modernisation, and sustainable development, recommending policy outcomes for the future.
Empirical explorations of the growth and productivity impacts of infrastructure have been characterized by ambiguous (countervailing signs) results with little robustness. A number of explanations of the contradictory findings have been proposed. These range from the crowd-out of private by public sector investment, non-linearities generating the possibility of infrastructure overprovision, simultaneity between infrastructure provision and growth, and the possibility of multiple (hence indirect) channels of influence between infrastructure and productivity improvements. The authors explore these possibilities using panel data for South Africa over the 1970-2000 period, and a range of 19 infrastructure measures. Using a number of alternative measures of productivity, the prevalence of ambiguous (countervailing signs) results, with little systematic pattern is also shown to hold for their data set in estimations that include the infrastructure measures in simple growth frameworks. The authors demonstrate that controlling for potential endogeneity of infrastructure in estimation robustly eliminates virtually all evidence of ambiguous impacts of infrastructure, due for example to possible overinvestment in infrastructure. Controlling for the possibility of endogeneity in the infrastructure measures renders the impact of infrastructure capital not only positive, but of economically meaningful magnitudes. These findings are invariant between the direct impact of infrastructure on labor productivity, and the indirect impact of infrastructure on total factor productivity.