Challenges in Analyzing Correlation between Water Infrastructure and Economic Development

Abstract

Availability of infrastructure significantly influences the development of regions and countries, hence theoretical and empirical research on the relationship between infrastructure capital and economic growth should provide answers to an important question: increasing the stock of public capital can stimulate economic growth? The issue of investment in infrastructure is critical as infrastructure development in Romania is supported by the EU Structural and Cohesion Funds. Channels and models of economic growth with one factorial variable characterizing the infrastructure will be compared, analysing their approaches, features and limits.Also, our case study will present some results for the impact of selected categories of public infrastructure sectors on the recent economic growth performances in some EU new member states. Thus, we hope to identify and discuss some conceptual and methodological challenges of grounding policies of development for various types of infrastructure. For Romania, we estimate the correlation between water supply and sewerage infrastructure and economic development indicator GDP per capita, at the regional county level.