Public Infrastructure Investment Research Articles

Colonial Origins of Comparative Development in Ghana

A striking feature of Ghana’s development landscape is the stark development disparity between a relatively developed South and a trailing North. Explanations for the disparity have often been hinged on differences in geography and past colonial experience. In this study, I provide an empirical justification for the historical hypothesis that the dynamics of colonial rule contributed significantly to the development divergence between the North and the South. I exploit the asymmetric regional distribution of past colonial public investments in education, health and infrastructure to show that the dynamics of colonial rule explain a significant portion of the development disparity between the two regions. I also survey compelling historical anecdotes to show that prior to the colonial project the North was a relatively prosperous region.

Urbanization and poverty in Sub-Saharan Africa: evidence from dynamic panel data analysis of selected urbanizing countries

Urbanization in Sub-Saharan Africa (SSA) is generally highlighted as a puzzle that deviates from the stylized facts in the literature. Using data from a panel of 29 urbanizing countries in SSA from 1985 to 2019, the study employs the two-step system generalized methods of moments to investigate the effect of urbanization on the Poverty Headcount ratio and Poverty Gap. The estimated urbanization elasticities of poverty indicate that at growth rates, a 1 percentage point increase in urbanization rate induces 0.04 and 0.05 (0.07 and 0.09) percentage points decrease in the Poverty Headcount ratio and Poverty Gap in the short-run (long-run), respectively. Similarly, at levels, a 1 percent increase in urbanization level induces 0.22 and 0.32 (0.60 and 0.68) percent decrease in the Poverty Headcount ratio and Poverty Gap in the short-run (long-run), respectively. Consistently, these results show stronger effect of urbanization on the depth of poverty relative to the incidence of poverty. These findings reappraise the literature on the urbanization of poverty in SSA as well as provide a nuanced understanding of the effect of urbanization on the different class of poverty measures. Notwithstanding, the poverty reduction potential of urbanization is not automatic and requires enormous investment in public infrastructure to achieve.

Integrated evaluation of resource and environmental carrying capacity during the transformation of resource-exhausted cities based on Euclidean distance and a Gray-TOPSIS model: A case study of Jiaozuo City, China

The development process of resource-based cities has obvious stage characteristics, and its resource and environmental carrying capacity is an important dynamic index to measure sustainable development and a powerful tool for the government decision-making, especially for resource-exhausted cities. Therefore, it is particularly necessary to accurately evaluate the carrying capacity of coal cities and correctly diagnose the obstacle factors. As one of the first resource-exhausted cities in China, Jiaozuo City has undergone different stages of evolution in its resource and environmental carrying capacity in the process of successful transformation. To this end, we constructed a Grey Relational Analysis model of Euclidean Distance based on TOPSIS (ED-GRA-TOPSIS) to evaluate the carrying capacity of the three subsystems of Resources, Environment and Socio-economic (RES) in Jiaozuo City from 2004 to 2019, and a diagnosis model of obstacle degree to calculate and analyze the main controlling factors affecting its sustainable development. The results show that: (1)The comprehensive resource and environmental carrying capacity of Jiaozuo City has experienced three stages of slow improvement (2004–2008), steady development (2009–2012) and rapid promotion (2013–2019). (2)In the early years, relying on resource endowment, the development level of the resource subsystem was obviously higher than that of the other two subsystems, followed by a “W”-shaped fluctuation; The carrying capacity of the environmental and socio-economic subsystems presents an upward trend. (3)Scientific and technological innovation, ecological and environmental protection, public infrastructure investment and green development are the main restrictive factors of Jiaozuo’s economic and social development, which weaken the temporary carrying capacity of its urban development, but in the long run, they are the primary driving force of sustainable development. Specific countermeasures and suggestions were proposed, including restricting the exploitation of resources and strictly controlling the emission of pollution, increasing the construction of urban public infrastructure and improving the level of public services, rationally planning the development direction of the industry and avoiding dependence on coal to another dependent development model. By establishing the ED-GRA-TOPSIS model, the reliability and rationality of the evaluation results are verified, which can provide reference for the formulation of development strategies of resource-based cities.

Let There Be Charge: Using Streetlights to Enable Vehicle Electrification

As electric vehicle (EV) adoption continues to grow, a significant investment in public charging infrastructure is needed. And investment in charging infrastructure is underway in parts of the country following targets set by the Biden Administration and American automakers for EVs to comprise up to 50 percent of new vehicle sales by 2030. This is in addition to the Infrastructure Investment and Jobs Act funding, which allocates $7.5 billion for programs and grants focused on expanding EV charging infrastructure, with a goal of reaching 500,000 public electric chargers in the United States.

Political tournaments and regional growth‐enhancing policies: Evidence from Chinese prefectures

AbstractIn a performance‐based promotion mechanism that rewards economic growth, we demonstrate how local governments' chiefs are incentivized to make policy decisions favored by upper‐level offices. Using annual data from prefectures in China, we find evidence that in response to a higher level of competition in the geographic cluster, local chiefs implement several growth‐enhancing policies. These include prioritizing investment in public infrastructure over redistributive spending and allocating additional resources in the core regions, relative to the cross‐jurisdictional borders. We also find that these policies lead to further regional growth. The results remain consistent even when we instrument the endogenous political replacements with the sudden death of chiefs, and when we use various measures for the effectiveness of chiefs. This evidence suggests that relative performance evaluation plays an essential role in the political system of China.

“DALSTON! WHO ASKED U?”: A Knowledge-Centred Perspective on the Mapping of Socio-Spatial Relations in East London

Since the turn of the millennium, Dalston in the London Borough of Hackney has experienced fundamental change through public and private investment in new infrastructure and processes of urban restructuring. This was paralleled by the reform of the national planning system, which aimed to devolve decision-making to the local level and increase the possibilities for residents and stakeholders to participate in planning processes. However, the difficulty of translating local needs and aspirations into policy goals and broadly accepted area action plans resulted in a crisis, which, in 2018, led to the introduction of the Dalston Conversation and subsequently the revision of planning goals. It is in this context that the Relational States of Dalston mapping project generated and assembled local knowledge about the web of socio-spatial relations between different local actors and in this way highlighted the significance and fragility of the communities’ networks and their spatial dimensions. The collection, ordering, integration, and production of knowledge can be seen as part of the core work in urban planning processes and policymaking. Which forms of knowledge are routinely used in planning contexts and define the relationship between planning action and urban transformation? To what extent could the mapping of local community relations add to this knowledge and help to improve decision-making processes in contested spaces of knowledge? In what ways could a relational understanding of space and architectural modes of research and representation contribute to the analysis, conceptualisation, and communication of local community relations? This article engages with these questions, using the mapping project in Dalston as a case study.

Public expenditure for water facility and road transport infrastructure in Ethiopia: a comparison of impacts using an economy-wide model

BackgroundEthiopian government is investing in a wide range of pro-poor sectors but the economic effects of public investment widely vary across sectors. With a limited public resource, public investment across sectors has to be prioritized based on their potential socio-economic contributions and/or economy-wide benefits. Therefore, the objective of this study is to compare and explore the economy-wide returns of public expenditure on water facility and energy technology (such as improved cooking stoves) on the one hand and public expenditure on road infrastructure on the other hand.MethodsThe source of data for this study is the 2005/06 updated Social accounting matrix (SAM) of Ethiopia. The analysis applies the STAGE Computable General Equilibrium (CGE) model developed by McDonald (2007). This study analyses two policy scenarios; the first scenario is an increase in the total factor productivity (TFP) of water fetching and firewood collection activities due to public investment in water facility and improved cooking stoves and the second scenario is a decrease in the trade and transport margins due to public investment in road transport infrastructure. For ensuring the comparability of the return of public expenditure, the same amount of public capital is invested in both scenarios.ResultsThe simulation outcome indicates that public investment in water facility and improved stoves results relatively higher domestic production in most sectors, larger household consumption, improved household welfare and improve in the major macroeconomic indicators (GDP, absorption, private consumption, and total domestic production) as compared to public investment in road transport infrastructure.ConclusionsIt is conducive to explore the potential economic contribution of public expenditure across the different pro-poor sectors before launching public investment in any specific sector. This will ensure limited public budgets are appropriately invested in the sector that can bring relatively highest economic-wide benefits to the wider society.

Roman roads to prosperity: Persistence and non-persistence of public infrastructure

In this paper, we explore the link between public transport infrastructure investments made during antiquity and the presence of infrastructure today; as well as the link between early infrastructure and economic activity, both in the past and in the present. We examine the territory under dominion of the Roman Empire at the zenith of its geographical extension (117 CE), and find a remarkable pattern of persistence showing that greater Roman road density goes along with (a) greater modern road density, (b) greater settlement formation in 500 CE, and (c) greater economic activity in 2010–2020. Exploiting a natural experiment, we find that persistence in road density and the strong link between early road density and contemporary economic development weaken to the point of insignificance in areas where the use of wheeled vehicles was abandoned and caravan trade routes replaced road-based trade from the first millennium CE until the late modern period. Studying channels of persistence, we identify the emergence of market towns during the early medieval period and the modern era as a robust mechanism sustaining the persistent effects of the Roman roads network. Our results contribute to a deeper understanding of the channels through which persistence in comparative development comes about.

Impacts of Global Climate Change on Temperature and Precipitation in Basra City, Iraq

Climate change affects countries’ economies and households through a variety of channels. Rising temperatures and changes in rainfall patterns affect agricultural yields of both rain fed and irrigated crops, and will change hydropower production, increased frequencies and magnitudes of floods and droughts can significantly increase the need for public investment in physical infrastructure. An investigation was carried out to identify trends in temperature and precipitation time series covering a period from (1970-2019) in the province of Basra south of Iraq, northwest of Arabian Gulf. The two variables were considered for analysis on both monthly and annual basis. The percentages of significant trends obtained for each parameter for 12 months and annually were presented. Temperature anomalies were plotted, the relationship between annual mean temperature and precipitation have been determined by Pearson’s Correlation coefficients, and were statistically measured. It was observed that the monthly and annually mean temperatures have increased, while precipitation trends have decreased; moreover, there is a negative weak relationship between temperature and precipitation, while a strong negative relationship was observed between the monthly average for the whole period of minimum and maximum temperature and rainfall

Examining the Relationship between Sustainable Finance and Green Economic Progress in Ghana: The Stakeholders’ Perspectives

Every economic development and progress entails wealth creation for the benefit of citizens sustainably. Sustainable development requires public and private investment in green assets and infrastructure that decreases carbon emissions, increases energy and resource efficiency, and preserves biodiversity and ecosystem services for humanity. Ghana is striving to transform its economic activities according to GE standards, although it faces challenges in meeting these standards. Moreover, adequate funding is limited or unavailable, especially for developing countries. This study uses a questionnaire survey to examine the relationship between SF and GE factors in Ghana. SF incorporates social and environmental issues into financial decision-making and performance. The result shows that the SFFs and the GEFs are significantly related. Ghana needs to strengthen its SF and GE policies from top to bottom to achieve remarkable green economic transformation and smooth transition.

Economic Growth Effect of Public Health Investment and Its Impact on Living Environment.

Based on the concern of Chinese residents for health and the improvement of related service demand, this paper studies the economic growth effect of public health investment and its impact on living environment by analyzing the determination coefficient estimated by Spearman and nonlinear curve. The results show that the impact of increasing government financial public health investment on regional economic growth rate is not only related to regional economic aggregate and development level, but also related to regional education level and regional publicity level in logical analysis. The improvement of residents' living environment brought by public infrastructure investment can effectively stimulate residents' concept of health consumption and then make the economy of nonpublic health undertakings achieve a higher growth rate. The economic growth rate brought by nonpublic health undertakings is also an important component of the local economic growth rate. It can be seen that strengthening the infrastructure construction of urban living environment can not only improve the overall living environment quality of the city, but also promote the development of the city and the development speed of the city.

Shaping successful mega-project investments

Abstract Many countries are proposing major public infrastructure investment, addressing the net zero imperative and need to recover from the pandemic. Yet the investments will deliver on these policy goals only if appraisals take account of strategic complementarities in determining the future path of the economy, including technological choices. Cost–benefit analysis as currently applied is unable to do this, even when incorporating wider economic benefits. Furthermore, in purporting to be a technical tool, it fails to acknowledge the inevitable political judgements and distributional consequences involved in selecting projects. There is a need for an approach to appraisal that identifies when major projects have transformational potential, and an approach to policy that ensures complementary investments occur, by tackling coordination failures either among different policy actors or between private- and public-sector activities.

Contradictory distributive principles and land tenure govern benefit-sharing of payments for ecosystem services (PES) in Chiapas, Mexico

Payments for Ecosystem Services (PES) are incentive-based instruments that provide conditional economic incentives for natural resources management. Research has shown that when economic incentives are parachuted into rural communities, participation and benefits are collectively negotiated and shared. However, we know little about how benefit-sharing evolves over time in community-based PES. To address this gap, we examine distributional justice in four communities of the state of Chiapas, Mexico, which participate in a PES programme, and we assess how local justice principles compare with the programme’s goals. Our analysis reveals patterns of both continuity and change in how communities share PES benefits, which reflect a suite of contradictory justice principles, including entitlement, merit, need, and equality. The studied communities distribute PES benefits by providing differentiated compensation to diverse groups of landholders via private cash payments, whilst also attending non-landed community members through public infrastructure investments. We show that benefit-sharing is strongly influenced by pre-existing land tenure features and associated norms, which in the study area include three different types of individual and common-property. Yet, we also show that communities continuously adjust benefit-sharing arrangements to navigate distributional challenges emerging from programme engagement. Overall, we provide novel insights on the evolution, diversity, and complexity of distributive justice in community-based PES and we advocate for a context-sensitive, nuanced, and dynamic account of justice in incentive-based conservation.

Broadband Speed and Firm Entry in Digitally Intensive Sectors: The Case of Croatia

We explore how improvements in digital infrastructure contribute to digital transformation of the Croatian economy. More specifically, we investigate under what conditions improvements in broadband speed are conductive for firm entry in digitally intensive sectors at the local level (cities and municipalities; LGUs) during the period 2014–2017. The results of the benchmark random effects panel data model suggest that a 10 percent increase in broadband speed increases the number of new digitally intensive firms by 0.68. Two-way interactions between explanatory variables indicate that improvements in broadband infrastructure yield the greatest number of new firm entries in densely populated LGUs, and in LGUs with a higher quality of human capital and greater public investment in physical infrastructure. Using the spatial Durbin panel method, we find improvements in broadband infrastructure exhibit positive firm entry effects both within and between cities and municipalities.

The spatial impact of entrepreneurial zones: firm, city and inter-city evidence

ABSTRACT We investigate the impact of a decade-long, large public entrepreneurial infrastructure investment programme in an emerging European economy. Using a unique data set, we examine the short-run firm city and inter-city effects of entrepreneurial zones (EZs). EZs have a positive impact on business investment, sales and especially the export revenues of firms located within them. The positive economic effects of EZs are limited to host and neighbouring towns and cities, decrease with distance, and eventually become negative. This points to the localized nature of the effects of EZs and their potential for spatial redistribution and clustering of economic activity.

How to support EV adoption: Tradeoffs between charging infrastructure investments and vehicle subsidies in California

Supporting the adoption of zero-emission vehicle (ZEVs), including plug-in electric vehicles (EVs), has become a priority for governments due to their ability to reduce petroleum demand, improve air quality, and reduce carbon dioxide (CO2) emissions. Optimal strategies to accelerate EV adoption must weigh the relative value of alternative policy mechanisms to consumers, including public charging infrastructure and vehicle purchase subsidies. We use a historically validated light-duty vehicle consumer choice tool, the ADOPT model, to simulate personal light-duty vehicle adoption and related emissions in California. ADOPT is updated to incorporate a quantification of the tangible value of public charging infrastructure, allowing us to simulate the impact of investments in public charging infrastructure and vehicle purchase subsidies under different scenarios. We show that both policies result in increased EV adoption, with the most effective policy varying depending on vehicle technology assumptions. Under conservative technology improvement assumptions, infrastructure investments are most effective in promoting EV sales and reducing CO2 emissions, while under optimistic technology improvement assumptions a combination of infrastructure and subsidies best supports EV sales and CO2 emission reductions.

Influence of tax dodging on tax justice in developing countries: some theory and evidence from Sub-Saharan Africa

PurposeThe mobilising domestic resources, in particular, taxation, is key to unlocking the resources required for public investment in infrastructure, growth and sustainable finance. This study aims to share the perception that the tax arrangements of states and the transnational corporations (TNCs) of developed states have a critical effect on the development prospects of the less powerful states in developing countries.Design/methodology/approachThis paper locates the role of TNCs tax practice within the broader dynamics of globalisation and the pursuit of profits, to argue that the drive of TNCs for higher profits can enrich our understanding of why some TNCs engage in tax dodging. This paper used publicly available evidence to shed light on the role played by TNCs in tax dodging practices in developing countries.FindingsThe evidence shows that tax havens and offshore financial centres, shaped by globalisation, are major structures facilitating the sophisticated tax schemes of highly mobile TNCs. This paper further shows that the corrosive effect of low-tax jurisdictions (“tax havens”) continues to represent a major obstacle to a regulation of global economic relations, which is required for maintaining sustainable social and economic development of poorer states.Research limitations/implicationsThis paper used publicly available evidence to illuminate the role played by TNCs in tax dodging practices in Sub-Saharan Africa.Practical implicationsThis paper, therefore, advocates a radical reform that could minimise the attendant problems created by the activities of TNCs and the enabling structures that facilitate these practices.Social implicationsTax dodging has played a major role in causing serious damage to the economic and social landscape in developing countries. This in turn, has undermined social welfare and also investment in the public services, thereby eroding the quality of life and producing a decline in average life expectancy.Originality/valueThis paper is a general review of literature and evidence on contemporary developmental issues.

Port capacity expansion under real options approach: a case study in Brazil

Investments in port container terminals are sensitive to uncertainties. Public investments in infrastructure have been significantly reduced in the last decade in developing countries. The Brazilian government infrastructure investment was only 1.85 % of GDP in 2019, representing the lowest level in the last fifty years. Nonetheless, the regulatory framework of the port sector in Brazil has undergone significant changes over time, increasing the number of private port container terminal leases. The expansion capacity of the private port facilities is strongly linked to the demand uncertainty, which impacts the financial return to the long run. In this scenario, the uncertainty of global cargo transportation can discourage infrastructure investments in this class of project in Brazil. To overcome these issues, the financial modelling applying real options approach is better suited than the traditional valuation methods based on Discounted Cash Flow (DCF) analysis. The present study aims to value flexibilities of anticipating, or postponing, or interrupting investments of an existing operational port terminal in Brazil with expansion capacity under the demand uncertainty. The financial decision to invest in a port expansion is modeled by an American option. The results demonstrate that the investor adds significant value to the project by having the possibility to postpone investments. The proposed model presents the contribution of optimizing the decision of sequential expansions of capacity in port terminals, at any time and according to scenarios' revelation. In addition, the model allows the government authorities to review lease contracts, considering the relevance of timing to invest in project expansion decisions. The proposed model can also be extended to other infrastructure projects in emerging economies.

Rural Infrastructure Access and Household Welfare in Ogun State

The study was carried out to determine the effect of access to rural infrastructure on household welfare in Ogun State. A three-stage sampling procedure was used to collect data from 442 selected respondents. The study was based on primary data obtained through questionnaires. Data were analysed using descriptive statistics and ordered logit regression. The study revealed that majority of the respondents were male (62.3%), married (80.1%), aged 48.1±11.5 years, with years of formal education, household size and farming experience of 7.3±4.7 years, 7.2±2.8 persons and 13.7±10.4 years, respectively. The MPCHHE was ₦7,152.10. The proportion of households with access to potable water, primary school, health centre, market and agro-centre were 89.1%, 88.5%, 43.9%, 64.5% and 33.7%, respectively. More households had high access to infrastructure (52.8%). Many of the households had high welfare (43.9%), while 24.4% had medium welfare and 31.7% had low welfare. High household welfare was explained by age (β=-0.32), male-headed households (β=0.51), non-farm income (β=0.20), ARI (β=-0.49), access to credit (β=0.39), educational level (β=0.25) and labour size (β=0.34), while age (β=0.15), male-headed households (β=- 0.12) and ARI (β=0.18) explained low household welfare. Based on these findings, it was recommended that policies that would increase public investment in functional rural infrastructure must be given high priority by the government.

Economic Impacts of Public Air Transport Investment: A Case Study of Egypt

This paper applies an input–output (I-O) approach and a dynamic computable general equilibrium (CGE) model to examine the economy-wide short- and long-run impacts of an increase in public capital investment in air transport infrastructure. The results of the I-O analysis reveal that air transport has above-average backward linkages with other sectors in the economy, with mining being the most intensive industry in intermediate input demand for air transport. The results of the CGE simulation show that at the macroeconomic level, expanding public air transport stock induces modest growth in GDP, employment, income, consumption, private investment, and trade. The findings show that the estimated impact of air transport investment is lower than estimated in studies on the “multiplier effect” of the investment using partial equilibrium techniques.