Transport Infrastructure Investment Research Articles

Transport Infrastructure Investment and Transport Sector Productivity on Economic Growth in South Africa (1975-2011)

This paper examines the impact of transport infrastructure investment and transport sector productivity on South African economic growth for the period 1975-2011. We use a Vector Error Correction Model and a Bayesian Vector Autoregressive model as empirical tools. The models provide an insight into the dynamic shocks on economic growth through impulse responses. The VECM reveals that economic growth is influenced by inflation, domestic fixed transport investments, and real exchange rate, yet on the BVAR model it was influenced by inflation, domestic fixed transport investments, multi factor productivity, real exchange rate and second period Gross Domestic Product DOI: 10.5901/mjss.2013.v4n13p761

Impacts of Transport Infrastructure on Productivity and Economic Growth: Recent Advances and Research Challenges

ABSTRACTThe paper provides an update of the survey focusing on estimating the contribution of transport infrastructure to productivity and economic growth. The central questions addressed are possible reasons behind the conflicting results reported in the literature on the elasticity of economic output with respect to transport infrastructure investment. After providing a systematic review of recent empirical studies on the effects of transport infrastructure on productivity and economic growth, the paper notes that controversial results can be attributed to ten causes (grouped into three categories for distinguishing): (1) related to different contexts: research period, geographical scales, and country's capability in enabling economic development; (2) related to different phenomena that are being measured: different economic sectors, different types of transport infrastructure, and different quality levels of transport infrastructure; and (3) related to distinct ways of measuring a similar phenomenon: measures used to describe the dependent variable and explanatory variable, functional specification, and estimation method of the econometric model. Strong network externalities of transport infrastructure may result in nonlinearity of the relationship between transport infrastructure and economic growth. Moreover, the absence of spatial concerns in infrastructure's impacts is another important source of inconclusive results. Finally, building on recent literature, the paper has discussed policy implications and identified several research avenues for further research.

Legal and Methodological Aspects of Environmental Impact Assessment of Investments in Transport Infrastructure

Modernization and construction of new transport infrastructure is a key element of economic and social development, on which depends the sustainability of economic growth in the regional and local scale. The development of transport infrastructure, however, has the negative effects. The continuous increase in the volume of transport services and the increasing volume of traffic leads to more and more serious environmental threats. A tool that allows for rather complete and objective identification of possible risks is the environmental impact assessment (EIA). Article closers the issue of the EIA procedure in the context of legal and methodological considerations. Its main aim is to prove, that the use of computer simulation to generate information for the EIA can greatly facilitate and enrich the existing methodology.

Comparative political economy of regional transport infrastructure investment in Europe

We study the role of political institutions in the regional allocation of public infrastructure investments in France, Germany, Italy, and Spain. We estimate the regional variation in the allocation for each country, controlling for the potential endogeneity of its impact on growth and distribution. We compare the importance of political institutions, federalism and the electoral system, with the normative criteria, efficiency, redistribution and equality. We find that on the macro-level there is some evidence that different national institutions do indeed shape political competition, but that partisan politics and, in particular, normative principles are overall more influential across all types of political systems.

Multi-entity perspective transportation infrastructure investment decision making

Investment in new large transportation infrastructure is capital-intensive and irreversible in nature. Private sector participation in infrastructure investment has gained popularity in recent times because of scarcity of resources at the public sector, and because of the ability of the private sector to build, operate, maintain such facilities, and share future uncertainties. In such cases, there are multiple entities each with different objectives in the project. Traditional techniques used to determine feasibility of such projects and do not consider two critical elements. These are the need (1) to identify major entities involved in these projects and their individual objectives, and (2) the importance of analyzing measures of effectiveness of each entity in a multi-objective context. A framework is proposed to address these issues along with a set of relaxation policies to reflect the nature and level of participation by the entities.First, the feasibility of each single entity perspective is determined and next, a multi-objective optimization (MOO) is proposed reflecting the perspectives of all entities. The MOO results in pareto-optimal solutions to serve as tradeoff between the participation levels of the multiple entities. The Analytic Hierarchy Process (AHP) is used as a tool to narrow down number of options for decision makers for further consideration. AHP and MOO are integrated to determine the feasibility of strategies from multi-entity perspectives. The framework is examined on the proposed multibillion dollar international river crossing connecting the city of Detroit in the U.S. and the city of Windsor in Canada. This methodology provides a decision making process tool for large-scale transportation infrastructure investment consisting of multiple entities.

Institutions and Service Delivery in Africa: An Overview

Institutions play a very crucial role in service delivery in Africa. The three papers in this issue explore the role of various institutions, both public and private, in delivering efficient services to promote economic growth. The first paper by Bold and Svensson is on Policies and Institutions for Effective Service Delivery: The Need of a Microeconomic and Micro-Political Approach. The authors review evidence on recent trends and outcomes in the education and health sectors in Sub-Saharan Africa, with a focus on the quality in service provision. The paper views low and ineffective spending on service delivery sectors as a symptom of the underlying institutional environment decay. The paper further argues that a microeconomic approach that explicitly takes political and bureaucratic incentives and constraints into account provides a fruitful, and complementary, way forward. The main finding of the paper is that innovations in the measurement of performance and ability in education and health open up ways to influence the political economic equilibrium. The second paper by Bold, Kimenyi and Sandefur looks at public and private provision of education in Kenya. The authors examine the superior examination performance of private primary schools and elite public secondary schools and test whether this performance reflects causal returns to the school type. The main finding is that, although there is a large increase in primary school enrolment following the introduction of free primary education, the increase is primarily driven by the increase in private school enrolments. The third paper by Blimpo, Harding and Wantchekon focuses on Public Investment in Infrastructure Giving Deliberations on Some Political Economy Considerations. The article constructs a unique data set to study the extent of the relationship between political marginalisation, public investment in transport infrastructure and food security in Benin, Ghana, Mali and Senegal. The main finding of the paper is that political marginalisation indirectly affects food security, via its impact on the quality of transport infrastructure. Moreover, the density of roads per square kilometre has a significant negative relationship to food insecurity. Copyright 2013 , Oxford University Press.

Public Investment in Rural Infrastructure: Some Political Economy Considerations

We have constructed a unique dataset to study the extent of the relationship between political marginalisation, public investment in transport infrastructure, and food security in Benin, Ghana, Mali and Senegal. We first show a strong relation between food security and road infrastructures after controlling for other factors known to affect food security, including climate and land productivity. To trace a potential mechanism by which political marginalisation impacts on food security, we then look at its relation with the allocation of roads within countries. We find support for the argument that political factors affect the location of roads after controlling for the economic importance of the areas, as well as many other factors. This finding is robust to a number of alternative specifications. We conclude that politically marginalised areas have significantly fewer roads, thus supporting our claim that political marginalisation indirectly affects food security, by undermining the quality and the allocation of transport infrastructures. Although we do not establish a causal effect here, this study is the first to empirically substantiate this relationship at the micro-level. Copyright 2013 , Oxford University Press.

Investing in Ontario's Infrastructure for Economic Growth and Prosperity

This paper documents the potential employment and other value-added benefits of infrastructure investments in Ontario. In particular, it details the impact of infrastructure investment as a counter-cyclical fiscal policy tool. A review of the recent literature reveals that infrastructure investment serves both as a tool for job creation and as a stimulus for the economy as a whole. During recessionary times infrastructure investments have been able to boost the economy and have served as a primary job creation tool, especially when the private sector investments have dried up. At the same time, these investments have produced the infrastructure necessary to support future economic growth. Published research also revealed that the input-output models have been the preferred tool to capture the relationship between infrastructure investments and their impact on economy. Thus, the primary aim of this paper is to illustrate the impact of infrastructure investment on job creation, GDP, and tax revenue in the Province of Ontario using an input-output model. The paper documents the results of a simulation exercise, using an input-output model of the Ontario economy based on a 2008 industry structure that estimated the economic impact of a $12-billion public sector (government) investment in non-residential building and engineering construction in Ontario. This infrastructure investment is estimated to have a $38.4-billion impact on the province’s economy. The $12-billion investment would create an estimated 203,000 jobs (person-years of employment) in the provincial economy, generate an estimated $10 billion in employment income and increase the provincial GDP by an estimated $18.5 billion. This investment would also generate an estimated $668.7 million in corporate taxes and $161.2 in personal income taxes. When the impacts are normalized to a $1-billion stimulus, the IO simulations revealed that during the 2008 recessionary period in Ontario, every billion dollar invested in non-residential building and engineering construction would create almost 17,000 new jobs. Of those, the model estimated 3,050 jobs in direct impact, 2,850 jobs in indirect impact, and 11,000 jobs in induced impact. These benefits are in addition to the longer term direct benefits of infrastructure investments that would result from the use of new or rehabilitated infrastructure. For instance, a $12-billion investment in transportation infrastructure could result in a significant improvement in accessibility and mobility in the region, and related improvements in labour and business productivity. The above-mentioned monetized impacts of infrastructure investments, however, are above and beyond the positive impacts on accessibility and productivity. Finally, the paper reviews transportation infrastructure plans for the Greater Toronto and Hamilton Area (GTHA) and discusses the investment tools identified recently by various agencies. The paper concludes that public-private partnerships for infrastructure development will promote greater use of private capital in the construction and development of public infrastructure. User fees and those taxes that are likely to modify consumer behaviour are recommended as the preferred tools for revenue generation to support the construction of new infrastructure. We recommend that sufficient funds should be made available for infrastructure development and renewal in Canada to maintain the competitiveness of Canadian businesses. The opportunity cost of not spending now reduces the productive capacity of the economy in the future, especially when public capital investments in infrastructure have the potential to generate immediate and substantial productivity gains.

The acceptability of road pricing in Vienna: the preference patterns of car drivers

The acceptability of road pricing has attracted considerable attention among researchers over the last decade, as is evident in the amount of literature about transport and environmental economics. The general conclusion from these studies has been that there is low acceptability for road pricing among car users. In this paper, we add more knowledge to the existing literature by conducting an acceptability study of road pricing in Vienna, where such a study has never been conducted before. We used a replication study approach where a previous approach used in the EU research project AFFORD (acceptability of fiscal and financial measures and organisational requirements for demand management) was replicated for Vienna and further supplemented with a conjoint analysis. In order to examining whether the Vienna study confirms previous findings. We investigated the acceptability of two concrete policy packages factors influencing this acceptability, and preference patterns that can be used in designing a road pricing policy for Vienna. The survey reveals a higher acceptability if road pricing schemes lead to perceived personal benefits. According to the multivariate analyses, the “personal outcome expectations”, “social norm” and “perceived effectiveness” variables account for more than 50 % of the criterion variance and therefore these are the most influential factors. Road pricing schemes can be an effective transport management instrument for a city particularly if they are associated with direct investment in public transport and public infrastructure. Thus, personal benefits can be perceived more easily and direct effects can be expected.

Transport Satellite Accounts are essential to boost Productivity and to improve Public Understanding

The development of a set of Transport Satellite Accounts is long overdue. The imperative need is to be able to assess the size and contribution of the transport sector and to track improvements in productivity arising from operational efficiency, optimal pricing and from investment in transport infrastructure. This would allow international comparisons against best practice to follow. The quality of public and private decisions would improve. Their availability would enable professional economists to add significantly more value.

The importance of disaggregated freight flow forecasts to inform transport infrastructure investments

This article presents the results of a comprehensive disaggregated commodity flow model for South Africa. The wealth of data available enables a segmented analysis of future freight transportation demand in order to assist with the prioritisation of transportation investments, the development of transport policy and the growth of the logistics service provider industry. In 2011, economic demand for commodities in South Africa’s competitive surface-freight transport market amounted to 622 million tons and is predicted to increase to 1834m tons by 2041, which is a compound annual growth rate of 3.67%. Fifty percent of corridor freight constitutes break bulk; intermodal solutions are therefore critical in South Africa. Scenario analysis indicates that 80%of corridor break-bulk tons can by serviced by four intermodal facilities – in Gauteng, Durban, Cape Town and Port Elizabeth. This would allow for the development of an investment planning hierarchy, enable industry targeting (through commodity visibility), ensure capacity development ahead of demand and lower the cost of logistics in South Africa.

The productivity of transport infrastructure investment: A meta-analysis of empirical evidence

Investments in transport infrastructure have been widely used by decision makers to encourage economic growth, particularly during periods of economic downturn. There has been extensive research on the linkage between transport infrastructure and economic performance since the late 1980s, characterised by widely varying evidence. We conduct a meta-analysis of the empirical evidence on the output elasticity of transport infrastructure, based on a sample of 563 estimates obtained from 33 studies. Previous meta-analyses have focused on total public capital and hence cannot appropriately explain the wide variation in the productivity effect of transport infrastructure nor provide guidance to policymakers on the returns to investment in different types of transport infrastructure. Our results indicate that the existing estimates of the productivity effect of transport infrastructure can vary across main industry groups, tend to be higher for the US economy than for European countries, and are higher for roads compared to other modes of transport. The variation in the estimates of the output elasticity of transport is also explained by differences in the methods and data used in previous studies. Failing to control for unobserved heterogeneity and spurious associations tends to result in higher values, while failing to control for urbanisation and congestion levels leads to omitted variable bias. These findings can be used to inform future research on the choice of model specification and estimation and transport-related policy making.

Why Is Monetary Integration not Achievable in the ECOWAS? A Survey of the Challenges and the Way Forward

The ECOWAS Monetary Cooperation Progamme (EMCP) was designed to facilitate regional trade through improvement in the ECOWAS multilateral payments system, the harmonization of economic policies and evolvement of common institutional arrangements. However, the EMCP, adopted in Abuja in 1987, has not recorded the desired progress. This paper is a theoretical survey of the factors that have inhibited the progress of monetary integration in the ECOWAS. Although monetary integration in the ECOWAS is envisaged to increase intra-trade among member countries, facilitate the establishment of a single capital market, improve macroeconomic policy coordination, strengthens common monetary authority, encourage freedom of movement of persons and also lead to market enlargement, it is not without challenges. The paper notes that the major challenges hindering the monetary integration process in the ECOWAS include; low intra-trade among member countries, fear of domination by the larger, wealthier and stronger countries, loss of revenue, uneven distribution of the benefits of integration, political instability, ethnic and religious crises and lack of political will and commitment on the part of member countries among other factors. The paper therefore, submits that the encouragement of intra-trade within the ECOWAS sub-region, massive investment in transport and communication infrastructures within the region, and improved government political will and commitment to implementing the monetary integration agreements would foster effective monetary integration in the ECOWAS for maximum benefits of all members.Key words: Benefits, Costs, Challenges, Monetary Integration.

Investimentos em transportes terrestres causam crescimento econômico?: um estudo quantitativo

O crescimento econômico de um país é alvo de estudos acadêmicos desde o início do século passado. Trabalhos seminais de Aschauer (1989a-d) estudou a relação crescimento vis a vis investimento público. Seguindo esta linha utilizando dos trabalhos de Balvir e Balbir (1984) e o teste de causalidade de Granger (1980), busca-se identificar, para o período 1950-2004 no Brasil, se investimentos em infraestrutura de transportes terrestres (ferroviário e rodoviário) causam crescimento e vice-versa. Como resultado, afirma-se que investimentos em ferrovia não movimentam a economia e que investimentos em rodovias, pelo menos para a década de 50, aumentaram de forma nominal o PIB, ou seja, movimentaram fortemente a economia. Os resultados indicam que investimentos em infraestruturas rodoviárias geram retorno para o crescimento do PIB mais cedo que investimentos em ferrovias.

The Transport Infrastructure Investment’s Impact on the Level of Sustainable Transport Indicators in the Czestochowa City

Currently, transportation is an integral part of any national economy, it accounts for the flow of raw materials and finished products from the original suppliers to the end users. Transport system is also very close linked to the society. It is not only an important branch of any national economy, but it is a system without which the modern economy cannot imagine any further activity. However, in addition to the benefits offered by the transport (the possibility of transport of goods and people, the mobility of societies and time saving), transport is also responsible for many adverse effects, for example its negative impact on the environment. But, today, an increasing number of societies and local authorities are aware that the pursuit of sustainable transport will bring tangible results, not only for the environment but also for the economy and society. This article presents the city of Czestochowa and activities of local authorities in order to balance the transport system in the city. The used methodology calculates the basic indicators of sustainable transport for the city of Czestochowa, then the investment in the transport system will described, together with their expected impact on the level of sustainability.

Incentives and Outcomes: China's Environmental Policy

China’s record-breaking economic growth is evoking increasing concern about unaddressed environmental problems. We show that, while city government spending on environmental infrastructure has a demonstrably positive environmental impact, city spending is nonetheless strongly tilted towards transportation infrastructure. City governments’ investment in transportation infrastructure is strongly positively correlated with real GDP growth, a measure of tangible economic growth that is found to raise city-level cadres’ odds of being promoted, and with land prices, which elevate city governments’ revenues from land lease sales and thus augment city-level cadres’ budgets. In contrast, city governments’ spending on environmental improvements is at best uncorrelated with cadres’ promotion odds, and is also uncorrelated with local GDP growth and land prices. These findings suggest that, were environmental quality explicitly linked to cadres’ chances of promotion, or were environmental quality to affect land prices substantially, city-level public investment in environmental improvement would rise.

Assessing the impact of the 2012 European Football Championships on the Polish economy

In this paper, we examine the impact of the UEFA EURO 2012™ on the Polish economy. The simulations are based on a dynamic computable general equilibrium (CGE) model and cover the years 2008–2020. We find that the main source of economic benefits is the acceleration of investments in transport infrastructure, which fosters growth of total factor productivity and the inflow of foreign direct investment. This contrasts with the results for more developed countries hosting major sporting events, where infrastructure effects are reported to be of less importance. Overall cumulative real GDP gains amount to 2.1% of the 2009 GDP level under the basic scenario.

HIGHWAY AND RAILWAY INFRASTRUCTURE, REAL INCOME AND STRUCTURAL BREAKS

Investment in transportation infrastructure contributes to economic development directly by lowering transportation costs and facilitating trade. Services provided by transport infrastructure are fundamental to economic activities due to enhanced mobility of goods and services. The aim of this paper is to analyze the relationship between the transportation infrastructure and economic growth in Turkey for 1970-2006 period. Empirical analysis from cointegration tests with and without structural break show that the long run effects of real income, highway length, railway length and labor force on real income vary within tests with respect to sign and significance. However, the relationship of the share of transportation in fixed capital investments and real income is positive and significant for all tests. This shows that private and public policies toward transportation infrastructure should target investments and improvements in the quality of transportation, not quantity.

Deficiencies of existing public transport system and a proposal for integrated hierarchical transport network as an improvement options: a case of Dhaka city

Public transport plays an important role in providing easy and affordable accessibility and mobility for dwellers in a city. This demand for transportation is brought about by the increased population of connecting nodes, cities, the rural-urban migration, and the scope for socio-economical facilities i.e. better opportunities for jobs, health facilities and educational scope etc. thus the economic viability of the people which leads to an increase in the usage of private vehicles. Dhaka is an over densely populated city and its transport system comprised of many different modes of travel – both motorized and non-motorized using the same road space – resulting in a high level of operational disorder, that significantly diminishes the efficiency and effectiveness of the existing transport uses. Dhaka is experiencing lots of traffic congestion and a great lack of traffic management. There has been no study dedicated to overcome the situation. Therefore, there is an urgent need to introduce a well-organized, properly scheduled rapid mass transit system minimizing the existing deficiencies. In this paper, an attempt has been made to identify the deficiencies of existing public transport system to put forward for an appropriate rapid mass transit system to recover the huge demand. An overview of the existing modes of travel and operation characteristics has been described. Finally, some proposals for integrated hierarchical transport network options are highlighted with the context of prevailing land use and transport characteristics, socio-economic context of Dhaka Metropolitan city. The findings of this research help planners and decision makers to optimize the investment in transport infrastructure.

Employment, Transport Infrastructure and Rural Depopulation: A New Spatial Equilibrium Model

In this paper we propose a new spatial equilibrium model, and use it to discuss issues related to rural depopulation. The discussion focuses on how investments in transport infrastructure and the spatial distribution of basic sector jobs can promote a relatively balanced growth of peripheral and central areas of a region. Through interdependencies in individual migration decisions and an economic base multiplier mechanism, negative exogenous shocks may take a peripheral zone beyond a bifurcation point, into an equilibrium of dramatically lower population and employment. We study how the location of bifurcation points depend on spatial interaction behavioural parameters and variables subject to regional policy. We also discuss the issue of the timing of interventions intended to prevent a process of rural depopulation.