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Infrastructure and Growth

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The New Palgrave Dictionary of Economics

Abstract

An adequate supply of infrastructure services has long been considered essential for economic development by both academics and policymakers. This article reviews recent theoretical and empirical literature on the effects of infrastructure development on growth. The theoretical literature has employed a variety of analytical settings regarding the drivers of income growth and the degree to which infrastructure represents a public or a private good. In turn, the empirical literature has tested for the growth effects of infrastructure development using various econometric methodologies on time series and cross-section macro- and microeconomic data. However, the empirical tests face challenging issues of measurement, identification and heterogeneity. Overall, the literature finds positive effects of infrastructure development on income growth. Still, the precise mechanisms through which these effects accrue, and their full impact on welfare, remain relatively unexplored.

This chapter was originally published in The New Palgrave Dictionary of Economics, Online edition, 2014. Edited by Palgrave Macmillan

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Acknowledgements

We thank Jon Temple for useful comments and suggestions. The views expressed here are ours only and do not necessarily reflect those of the World Bank, its Executive Directors or the countries they represent.

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  1. http://link.springer.com/referencework/10.1057/978-1-349-95121-5

    César Calderón & Luis Servén

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  1. César Calderón
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  2. Luis Servén
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    Calderón, C., Servén, L. (2014). Infrastructure and Growth. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95121-5_2885-1

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    • DOI: https://doi.org/10.1057/978-1-349-95121-5_2885-1

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