Abstract
There are substantial opportunities in the developing world to capture scale and agglomeration economies in the design and lay-out of major infrastructure investments through international cooperation in the fields of transportation, power and petroleum supply facilities. On a relative scale, these opportunities are much larger in these countries than in the developed world because of the very small markets and the technologically fixed, minimumsize systems that have to be installed to serve them. In addition, joint developments may sometimes generate substantial secondary development benefits. To assess the net benefits of such projects analyses have to be undertaken that compare these benefits with those of all other, non-cooperative alternatives. Special attention has to be given to the proper definition of the real opportunity costs of each one of them. In spite of the numerous complexities facing the realization of such undertakings, it is concluded that the opportunities for reaping large benefits are numerous and substantial and should be systematically supported by international aid agencies.
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Sehramm, G. Regional cooperation and economic development. Ann Reg Sci 20, 1–16 (1986). https://doi.org/10.1007/BF01287237
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DOI: https://doi.org/10.1007/BF01287237