INFRASTRUCTURES AND ECONOMIC PERFORMANCE: A CRITICAL COMPARISON ACROSS FOUR APPROACHES
Abstract
The paper reviews studies analysing the relationship between infrastructures and economic performance. Four different approaches are separately considered along an ideal path from three theory-based to a data-oriented models: the production function approach, the cost function approach, growth-models, and vector autoregression models. The review shows that, even with different shades and points of caution, the general idea that infrastructure has an economic enhancing effect appears to be quite robust across studies belonging to different methodological approaches.
References
[1] Akaike, H. 1969. Fitting Autoregressive Models for Prediction. Annals of the Institute of Statistical Mathematics, 21: 243-247.
[2] Akaike, H. 1970. Statistical Predictor Identification. Annals of the Institute of Statistical Mathematics 22: 203-217.
[3] Albala-Bertrand, J.M., and Mamatzakis, E.C. et al. 2004. The Impact of Public Infrastructure on the Productivity of the Chilean Economy. Review of Development Economics 8: 266-278.
[4] Aschauer, D.A. 1989. Is Public Expenditure Productive? Journal of Monetary Economics 23: 177-200.
[5] Barro, R.J. 1988. Government Spending In A Simple Model Of Endogenous Growth. National Bureau Of Economic Research Working Paper No. 2588.
[6] Belloc, M., and Vertova, P. 2006. Public Investment and Economic Performance in Highly Indebted Poor Countries: An Empirical Assessment. International Review of Applied Economics 20 151-170.
[7] Biehl, D. 1991. The Role of Infrastructure in Regional Development. in Infrastructure and Regional Development. R.W.Vickerman. London, Pion.
[8] Bonaglia, F., La Ferrara, E. et al. 2001. Public Capital and Economic Performance: Evidence from Italy. IGIER Working Paper No. 163.
[9] Calderon, C., and Serven, L. 2002. The Output Cost of Latin America’s Infrastructure Gap. Central Bank of Chile Working Paper No. 186.
[10] Canning, D., and Bennathan, E. 2000. The Social Rate of Return on Infrastructure Investments. World Bank Working Paper No. 2390.
[11] Canning, D., and Pedroni, P. 1999. Infrastructure and Long Run Economic Growth. Mimeo.
[12] Cass, D. 1965. Optimum growth in an aggregative model of capital accumulation. Review of Economic Studies 32: 233-240.
[13] Cellini, R., and Torrisi, G. 2009. The Regional Public Spending for Tourism in Italy: An Empirical Analysis. MPRA paper No.16131.
[14] Cohen, J.P., and Morrison, Paul, C.J. 2004. Public Infrastructure Investment, Interstate Spatial Spillovers, and Manufacturing Costs. Review of Economics and Statistics 86: 551-560.
[15] Crihfield, J., and Panggabean, M. 1995. Is public infrastructure productive? A metropolitan perspective using new capital stock estimates. Regional Science and Urban Economics 25: 607-630.
[16] De Long, J.B. 1988. Productivity Growth, Convergence, and Welfare: Comment. American Economic Review 78: 1138-54.
[17] Demetriades, P.O., and Mamuneas, T.P. 2000. Intertemporal Output and Employment Effects of Public Infrastructure Capital: Evidence from 12 OECD Economies. Economic Journal 110: 687-712.
[18] Di Palma, Maurizio, and Mazziotta, C., et al., Eds. (1998). Infrastrutture e sviluppo. Primi risultati: indicatori quantitativi a confronto (1987-95). Quaderni sul Mezzogiorno e le politiche territoriali. Roma, Confindustria.
[19] Easterly, W., and Rebelo, S. 1993. Fiscal policy and economic growth An empirical investigation. Journal of Monetary Economics 32: 417-458.
[20] Esfahani, H., and Ramìres, M.T. 2003. Institutions, Infrastructure and Economic Growth. Journal of Development Economics 70: 443-477.
[21] Estache, A. 2006. Infrastructure. A Survey of Recent and Upcoming Issues. World Bank. Mimeo.
[22] Evans, P., and Karras, G. 1994. Is government capital productive? Evidence from a panel of seven countries. Journal of Macroeconomics 16(2): 271-279.
[23] Everaert, G., and Heylen, F. 2004. Public Capital and Long-Term Labour Market Performance in Belgium. Journal of Policy Modelling 26: 95-112.
[24] Ezcurra, R., Gil, C., et al. 2005. Public Capital, Regional Productivity and Spatial Spillovers. The Annals of Regional Science 39: 471-94.
[25] Fernald, J. 1999. Assessing the Link between Public Capital and Productivity. American Economic Review 89: 619-638.
[26] Ferrara, E.L., and Marcellino, M. 2000. TFP, Costs, and Public Infrastructure: An Equivocal Relationship. IGIER Working Paper No. 176.
[27] Ghali, K.H. 1998. Public Investment and Private Capital Formation in a Vector Error-Correction Model of Growth. Applied Economics 30: 837-844.
[28] Glover, D.R., and Simon, J.L. 1975. The effect of population density on infrastructure: the case of road building. Economic Development and Cultural Change 23: 453--468.
[29] Gramlich, E.M. 1994. Infrastructure Investment: A Review Essay. Journal of Economic Literature XXXIII: 1176-1196.
[30] Hansen, L. 1982. Large sample properties of generalized method of moments estimators. Econometrica 50(3): 1029-1054.
[31] Hansen, N.M. 1965. The structure and determinants of local public investment expenditures. Review of economics and statistics 2: 150-162.
[32] Hausman, J. 1978. Specication tests in econometrics. Econometrica 46(3): 1251-1271.
[33] Infrastructure Canada. 2007. Infrastructure and Productivity: A Literature Review. Transport Infrastructure and Communities Portfolio, Government of Canada. Research and Analysis Division Infrastructure.
[34] Irmen, A., and Kuehnel, J. 2008. Productive Government Expenditure and Economic Growth. CESifo. Working paper No. 2314.
[35] Kamps, C. 2006. New Estimates of Government Net Capital Stocks for 22 OECD Countries 1960-2001. IMF Staff Papers 53: 120-150.
[36] Karadag, M., Ozlem Onder, A., et al. 2005. Growth of Factor Productivity in the Turkish Manufacturing Industry at Provincial Level. Regional Studies 39,(2): 213-223.
[37] Kemmerling, A., and Stephan, A. 2002. The Contribution of Local Public Infrastructure to Private Productivity and its Political Economy: Evidence from a Panel of Large German Cities. Public Choice 113(34): 403-424.
[38] Koopmans, T.C. 1965. On the concept of optimal economic growth. in (Study Week on the) Econometric Approach to Development Planning. Amsterdam, North-Holland Publishing Co: chap. 4. pp. 225-87.
[39] Leamer, E.E., Ed. 1978. Specification Searches: Ad Hoc Inference from Nonexperimental Data. New York, Wiley.
[40] Levine, R., and Renelt, D. 1990. Cross Country Studies of Growth and Policy: Some Methodological, Conceptual, and Statistical Problems. World Bank.
[41] Levine, R., and Renelt, D. 1992. A Sensitivity Analysis of Cross-Country Growth Regressions. American Economic Review 82: 942-963.
[42] Levine, R., and Zervos, S. 1993. What We Have Learned About Policy and Growth from Cross-Country Regressions? American Economic Review, 83: 427-430.
[43] Looney, R., and Frederiksen, P. 1981. The Regional Impact of Infrastructure Investment in Mexico. Regional Studies 15(4): 285-296.
[44] Marrocu, E., Paci, R., et al. 2006. Gli effetti del Capitale Pubblico Sulla produttività delle Regioni Italiane. In: Barca, F., Cappiello, F., Ravoni, L., and Volpe, M. Federalismo, equità, sviluppo. I risultati delle politiche pubbliche analizzati e misurati dai Conti Pubblici Territoriali. Bologna, Il Mulino.
[45] Mas, M., Maudos, J., et al. 1996. Infrastructures and Productivity in the Spanish Regions. Regional Studies, Taylor and Francis Journals 30(7): 641-649.
[46] Mastromarco, C., and Woitek, U. 2004. Public Infrastructure investment and efficiency in Italian Regions. www.cide.info/conf/papers/1161.pdf.
[47] Mittnik, S., and Neumann, T. 2001. Dynamic Effects of Public Investment: Vector Autoregressive Evidence from Six Industrialized Countries. Empirical Economics 26: 429-446.
[48] Morrison, C.J., and Schwartz, A.E. 1996. State Infrastructure and Productive Performance. American Economic Review 86(5): 1095-1111.
[49] Pereira, A.M. 2000. Is All Public Capital Created Equal? Review of Economics and Statistics 82: 513-518.
[50] Pereira, A.M. 2001. On the Effects of Public Investment on Private Investment: What Crowds In What? Public Finance Review 29: 3-25.
[51] Pereira, A.M., and Sagalés, O.R. 2006. Public Infrastructures and Regional Asymmetries in Spain. Department of Economics. College of William and Mary Working Papers 46.
[52] Puig-Junoy, J. 2001. Technical Inefficiency and Public Capital in U.S. States: A Stochastic Frontier Approach. Journal of Regional Science 41(1): 75-96.
[53] Putnam, R.D., Ed. 1993. Making Democracy Work. Civic Tradictions in Modern Italy. Princenton Princenton University Press.
[54] Romp, W., and de Haan, J. 2007. Public Capital and Economic Growth: A Critical Survey. Perspektiven der Wirtschaftspolitik 8(Special Issue): 6-52.
[55] Sanchez-Robles, B. 1998. Infrastructure Investment and Growth: Some Empirical Evidence. Contemporary Economic Policy 16: 98-108.
[56] Sims, C., Stock, J., et al. 1990. Inference in Linear Time Series Models with Some Unit Roots. Econometrica 58: 113-144.
[57] Solow, R.M. 1956. A Contribution to the Theory of Economic Growth. Quarterly Journal of Economics 70: 65-94.
[58] Solow, R.M. 1994. Perspectives on Growth Theory. The Journal of Economic Perspectives 8( 1): pp. 45-54.
[59] Stephan, A. 2002. Regional Infrastructure Policy and its Impact on Productivity: A Comparison of Germany and France. Wissenschaftszentrum Berlin, CIC Research Unit Working Paper No. FS IV 0002.
[60] Sturm, J.-E., Jacobs, J., et al. 1995. Productivity impacts of infrastructure investment in the Netherlands 1853-1913. University of Groningen. Research Institute SOM (Systems, Organisations and Management) Research Report 95D3.
[61] Sturm, J.-E., Kuper, G.H., et al. 1996. Modelling government investment and economic growth on a macro level: a review. CCSO Series No. 29.
[62] Torrisi, G. 2009. Public Infrastructure: Definition, Classification and Measurement Issues, Economics, Management, and Financial Market. 4 (3).
[63] Wooldridge, J.M., Ed. 2002. Introductory Econometrics A Modern Approach, South-western Publishing Group.
[64] Wylie, P. 1996. Infrastructure and Canadian Economic Growth. Canadian Journal of Economics 29 (Special Issue): S350-355.
[65] Xiaobo, Z., and Fan, S. 2001. How Productive is Infrastructure? New Approach and Evidence from Rural India. International Food Policy Research Institute Discussion Paper No. 84.
[66] Zegeye, A.A. 2000. US Public Infrastructure and its contribution to private sector productivity. US Department of Labor Bureau of Labor Statistics.
[2] Akaike, H. 1970. Statistical Predictor Identification. Annals of the Institute of Statistical Mathematics 22: 203-217.
[3] Albala-Bertrand, J.M., and Mamatzakis, E.C. et al. 2004. The Impact of Public Infrastructure on the Productivity of the Chilean Economy. Review of Development Economics 8: 266-278.
[4] Aschauer, D.A. 1989. Is Public Expenditure Productive? Journal of Monetary Economics 23: 177-200.
[5] Barro, R.J. 1988. Government Spending In A Simple Model Of Endogenous Growth. National Bureau Of Economic Research Working Paper No. 2588.
[6] Belloc, M., and Vertova, P. 2006. Public Investment and Economic Performance in Highly Indebted Poor Countries: An Empirical Assessment. International Review of Applied Economics 20 151-170.
[7] Biehl, D. 1991. The Role of Infrastructure in Regional Development. in Infrastructure and Regional Development. R.W.Vickerman. London, Pion.
[8] Bonaglia, F., La Ferrara, E. et al. 2001. Public Capital and Economic Performance: Evidence from Italy. IGIER Working Paper No. 163.
[9] Calderon, C., and Serven, L. 2002. The Output Cost of Latin America’s Infrastructure Gap. Central Bank of Chile Working Paper No. 186.
[10] Canning, D., and Bennathan, E. 2000. The Social Rate of Return on Infrastructure Investments. World Bank Working Paper No. 2390.
[11] Canning, D., and Pedroni, P. 1999. Infrastructure and Long Run Economic Growth. Mimeo.
[12] Cass, D. 1965. Optimum growth in an aggregative model of capital accumulation. Review of Economic Studies 32: 233-240.
[13] Cellini, R., and Torrisi, G. 2009. The Regional Public Spending for Tourism in Italy: An Empirical Analysis. MPRA paper No.16131.
[14] Cohen, J.P., and Morrison, Paul, C.J. 2004. Public Infrastructure Investment, Interstate Spatial Spillovers, and Manufacturing Costs. Review of Economics and Statistics 86: 551-560.
[15] Crihfield, J., and Panggabean, M. 1995. Is public infrastructure productive? A metropolitan perspective using new capital stock estimates. Regional Science and Urban Economics 25: 607-630.
[16] De Long, J.B. 1988. Productivity Growth, Convergence, and Welfare: Comment. American Economic Review 78: 1138-54.
[17] Demetriades, P.O., and Mamuneas, T.P. 2000. Intertemporal Output and Employment Effects of Public Infrastructure Capital: Evidence from 12 OECD Economies. Economic Journal 110: 687-712.
[18] Di Palma, Maurizio, and Mazziotta, C., et al., Eds. (1998). Infrastrutture e sviluppo. Primi risultati: indicatori quantitativi a confronto (1987-95). Quaderni sul Mezzogiorno e le politiche territoriali. Roma, Confindustria.
[19] Easterly, W., and Rebelo, S. 1993. Fiscal policy and economic growth An empirical investigation. Journal of Monetary Economics 32: 417-458.
[20] Esfahani, H., and Ramìres, M.T. 2003. Institutions, Infrastructure and Economic Growth. Journal of Development Economics 70: 443-477.
[21] Estache, A. 2006. Infrastructure. A Survey of Recent and Upcoming Issues. World Bank. Mimeo.
[22] Evans, P., and Karras, G. 1994. Is government capital productive? Evidence from a panel of seven countries. Journal of Macroeconomics 16(2): 271-279.
[23] Everaert, G., and Heylen, F. 2004. Public Capital and Long-Term Labour Market Performance in Belgium. Journal of Policy Modelling 26: 95-112.
[24] Ezcurra, R., Gil, C., et al. 2005. Public Capital, Regional Productivity and Spatial Spillovers. The Annals of Regional Science 39: 471-94.
[25] Fernald, J. 1999. Assessing the Link between Public Capital and Productivity. American Economic Review 89: 619-638.
[26] Ferrara, E.L., and Marcellino, M. 2000. TFP, Costs, and Public Infrastructure: An Equivocal Relationship. IGIER Working Paper No. 176.
[27] Ghali, K.H. 1998. Public Investment and Private Capital Formation in a Vector Error-Correction Model of Growth. Applied Economics 30: 837-844.
[28] Glover, D.R., and Simon, J.L. 1975. The effect of population density on infrastructure: the case of road building. Economic Development and Cultural Change 23: 453--468.
[29] Gramlich, E.M. 1994. Infrastructure Investment: A Review Essay. Journal of Economic Literature XXXIII: 1176-1196.
[30] Hansen, L. 1982. Large sample properties of generalized method of moments estimators. Econometrica 50(3): 1029-1054.
[31] Hansen, N.M. 1965. The structure and determinants of local public investment expenditures. Review of economics and statistics 2: 150-162.
[32] Hausman, J. 1978. Specication tests in econometrics. Econometrica 46(3): 1251-1271.
[33] Infrastructure Canada. 2007. Infrastructure and Productivity: A Literature Review. Transport Infrastructure and Communities Portfolio, Government of Canada. Research and Analysis Division Infrastructure.
[34] Irmen, A., and Kuehnel, J. 2008. Productive Government Expenditure and Economic Growth. CESifo. Working paper No. 2314.
[35] Kamps, C. 2006. New Estimates of Government Net Capital Stocks for 22 OECD Countries 1960-2001. IMF Staff Papers 53: 120-150.
[36] Karadag, M., Ozlem Onder, A., et al. 2005. Growth of Factor Productivity in the Turkish Manufacturing Industry at Provincial Level. Regional Studies 39,(2): 213-223.
[37] Kemmerling, A., and Stephan, A. 2002. The Contribution of Local Public Infrastructure to Private Productivity and its Political Economy: Evidence from a Panel of Large German Cities. Public Choice 113(34): 403-424.
[38] Koopmans, T.C. 1965. On the concept of optimal economic growth. in (Study Week on the) Econometric Approach to Development Planning. Amsterdam, North-Holland Publishing Co: chap. 4. pp. 225-87.
[39] Leamer, E.E., Ed. 1978. Specification Searches: Ad Hoc Inference from Nonexperimental Data. New York, Wiley.
[40] Levine, R., and Renelt, D. 1990. Cross Country Studies of Growth and Policy: Some Methodological, Conceptual, and Statistical Problems. World Bank.
[41] Levine, R., and Renelt, D. 1992. A Sensitivity Analysis of Cross-Country Growth Regressions. American Economic Review 82: 942-963.
[42] Levine, R., and Zervos, S. 1993. What We Have Learned About Policy and Growth from Cross-Country Regressions? American Economic Review, 83: 427-430.
[43] Looney, R., and Frederiksen, P. 1981. The Regional Impact of Infrastructure Investment in Mexico. Regional Studies 15(4): 285-296.
[44] Marrocu, E., Paci, R., et al. 2006. Gli effetti del Capitale Pubblico Sulla produttività delle Regioni Italiane. In: Barca, F., Cappiello, F., Ravoni, L., and Volpe, M. Federalismo, equità, sviluppo. I risultati delle politiche pubbliche analizzati e misurati dai Conti Pubblici Territoriali. Bologna, Il Mulino.
[45] Mas, M., Maudos, J., et al. 1996. Infrastructures and Productivity in the Spanish Regions. Regional Studies, Taylor and Francis Journals 30(7): 641-649.
[46] Mastromarco, C., and Woitek, U. 2004. Public Infrastructure investment and efficiency in Italian Regions. www.cide.info/conf/papers/1161.pdf.
[47] Mittnik, S., and Neumann, T. 2001. Dynamic Effects of Public Investment: Vector Autoregressive Evidence from Six Industrialized Countries. Empirical Economics 26: 429-446.
[48] Morrison, C.J., and Schwartz, A.E. 1996. State Infrastructure and Productive Performance. American Economic Review 86(5): 1095-1111.
[49] Pereira, A.M. 2000. Is All Public Capital Created Equal? Review of Economics and Statistics 82: 513-518.
[50] Pereira, A.M. 2001. On the Effects of Public Investment on Private Investment: What Crowds In What? Public Finance Review 29: 3-25.
[51] Pereira, A.M., and Sagalés, O.R. 2006. Public Infrastructures and Regional Asymmetries in Spain. Department of Economics. College of William and Mary Working Papers 46.
[52] Puig-Junoy, J. 2001. Technical Inefficiency and Public Capital in U.S. States: A Stochastic Frontier Approach. Journal of Regional Science 41(1): 75-96.
[53] Putnam, R.D., Ed. 1993. Making Democracy Work. Civic Tradictions in Modern Italy. Princenton Princenton University Press.
[54] Romp, W., and de Haan, J. 2007. Public Capital and Economic Growth: A Critical Survey. Perspektiven der Wirtschaftspolitik 8(Special Issue): 6-52.
[55] Sanchez-Robles, B. 1998. Infrastructure Investment and Growth: Some Empirical Evidence. Contemporary Economic Policy 16: 98-108.
[56] Sims, C., Stock, J., et al. 1990. Inference in Linear Time Series Models with Some Unit Roots. Econometrica 58: 113-144.
[57] Solow, R.M. 1956. A Contribution to the Theory of Economic Growth. Quarterly Journal of Economics 70: 65-94.
[58] Solow, R.M. 1994. Perspectives on Growth Theory. The Journal of Economic Perspectives 8( 1): pp. 45-54.
[59] Stephan, A. 2002. Regional Infrastructure Policy and its Impact on Productivity: A Comparison of Germany and France. Wissenschaftszentrum Berlin, CIC Research Unit Working Paper No. FS IV 0002.
[60] Sturm, J.-E., Jacobs, J., et al. 1995. Productivity impacts of infrastructure investment in the Netherlands 1853-1913. University of Groningen. Research Institute SOM (Systems, Organisations and Management) Research Report 95D3.
[61] Sturm, J.-E., Kuper, G.H., et al. 1996. Modelling government investment and economic growth on a macro level: a review. CCSO Series No. 29.
[62] Torrisi, G. 2009. Public Infrastructure: Definition, Classification and Measurement Issues, Economics, Management, and Financial Market. 4 (3).
[63] Wooldridge, J.M., Ed. 2002. Introductory Econometrics A Modern Approach, South-western Publishing Group.
[64] Wylie, P. 1996. Infrastructure and Canadian Economic Growth. Canadian Journal of Economics 29 (Special Issue): S350-355.
[65] Xiaobo, Z., and Fan, S. 2001. How Productive is Infrastructure? New Approach and Evidence from Rural India. International Food Policy Research Institute Discussion Paper No. 84.
[66] Zegeye, A.A. 2000. US Public Infrastructure and its contribution to private sector productivity. US Department of Labor Bureau of Labor Statistics.
Published
2010-06-30
How to Cite
TORRISI, Gianpiero.
INFRASTRUCTURES AND ECONOMIC PERFORMANCE: A CRITICAL COMPARISON ACROSS FOUR APPROACHES.
Theoretical and Practical Research in Economic Fields, [S.l.], v. 1, n. 1, p. 86-96, june 2010.
ISSN 2068-7710.
Available at: <https://journals.aserspublishing.eu/tpref/article/view/1096>. Date accessed: 23 apr. 2024.
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