Quality Infrastructure and Sustainable Development: An Empirical Economic Analysis

Abstract

Sustainable development is one of the most important goals set by many countries worldwide. The United Nations (UN) has prioritized it as a significant objective within the Sustainable Development Goals (SDGs) program. Sustainable development implies economic growth that benefits both present and future generations without compromising their well-being. Some analysts argue that sustainable infrastructure may be more advantageous when evaluated based on private cost-benefit criteria, although comparisons are needed for clarity. One challenge in testing this hypothesis is the lack of a clear measurable distinction between sustainable and non-sustainable infrastructure at the national or global level. In this study, we utilize two quality infrastructure indices to quantify the extent of sustainable infrastructure. These measures are then applied to a sample of countries to test hypotheses regarding the effect of per capita Gross Domestic Product (GDP) and population on a country’s investment in quality infrastructure. The findings support the hypotheses that per capita GDP and population have a nonlinear effect on quality infrastructure, with both variables having a positive effect, albeit at a decreasing rate. At certain higher levels of per capita GDP or population, the effect turns negative. The policy implications for national governments and international organizations are also discussed, highlighting the need for tailored strategies to promote sustainable infrastructure development without undermining other much needed priorities such as eradicating extreme poverty. Keywords: development, sustainability, per capita GDP, population, quality infrastructure, marginal effects, elasticity, investment gaps