The idea that infrastructure investment should have a positive effect on economic growth is intuitively appealing. Roads, electricity provision, and communications appear to be necessary for the basic functioning of an economy. It is not hard to write an economic model linking infrastructure and productivity, and indeed several such models have been written. Thus, one would expect the existence of a link between infrastructure and development to have been long established. However, the discussion of the link between infrastructure and economic growth is far from settled. A number of prominent authors have argued that this link is weak or nonexistent, and the question as to whether infrastructure should be given preference in public investment decisions is a controversial one. This report intends to serve as a guide to literature on this link that clarifies the grounds for disagreement between different authors and the implications of existing empirical results. Download the report. See more from the Building a Stronger America series.
Tags: infrastructure
The Role of Infrastructure Investment in Economic Growth
The idea that infrastructure investment should have a positive effect on economic growth is intuitively appealing. Roads, electricity provision, and communications appear to be necessary for the basic functioning of an economy. It is not hard to write an economic model linking infrastructure and productivity, and indeed several such models have been written. Thus, one would expect the existence of a link between infrastructure and development to have been long established. However, the discussion of the link between infrastructure and economic growth is far from settled. A number of prominent authors have argued that this link is weak or nonexistent, and the question as to whether infrastructure should be given preference in public investment decisions is a controversial one. This report intends to serve as a guide to literature on this link that clarifies the grounds for disagreement between different authors and the implications of existing empirical results. Download the report. See more from the Building a Stronger America series.
Tags: infrastructure