Abstract
This study examines the temporal relationship between transport infrastructure investment and output in Cote d’Ivoire over the period 1970-2002. Using cointegration and causality tests within a multivariate framework, it is found that the public investment in transport infrastructure, private investment and economic output are cointegrated. The results of the Granger causality tests reveal that public investment in transport does not have a causal impact on economic growth; conversely economic growth has a causal impact on transport investment.
Highlights
The role of public infrastructure in the process of economic growth has received a wide attention since the contributions of Aschauer (1989) and the theoretical model of Barro (1990)
It has been argued that while public investment may be considered as a factor input that contribute to economic growth, the way it is financed may crowd out private investment (Mittnik & Neumann, 2001)
We argue that an appropriate way to overcome these shortcomings is to use time series techniques by applying unit root, cointegration and causality tests in a VAR framework, which allows all variables to enter as endogenous within a system of equations
Summary
The role of public infrastructure in the process of economic growth has received a wide attention since the contributions of Aschauer (1989) and the theoretical model of Barro (1990). These seminal works showed that public capital generates spillover effects for the private sector. Good transport linkages reduce transport costs, road congestion and promote industrial development throughout the country. This implies that the better the infrastructure the more successful the economic development polices (Ashipala & Haimbodi, 2003). Especially in transport, communications and information technologies, are regarded as one of the major impediments for investment and growth in many African countries (World Bank, 1994)
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