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This paper describes a method for reducing the economic risks associated with predictable natural hazards by enhancing the resilience of national infrastructure systems. The three-step generalised framework is described along with examples. Step one establishes economic baseline growth without the disaster impact. Step two characterises economic growth constrained by a disaster. Step three assesses the economy's resilience to the disaster event when it is buffered by alternative resiliency investments. The successful outcome of step three is a disaster-resistant core of infrastructure systems and social capacity more able to maintain the national economy and development post disaster. In addition, the paper considers ways to achieve this goal in data-limited environments. The method provides a methodology to address this challenge via the integration of physical and social data of different spatial scales into macroeconomic models. This supports the disaster risk reduction objectives of governments, donor agencies, and the United Nations International Strategy for Disaster Reduction. [ABSTRACT FROM AUTHOR]

Agglomeration economies explain why productivity increases as the size of agglomeration increases, and thereby partly explain the importance of location and space in economic development. Agglomeration economies are based on the distance between firms, labour and the market. Infrastructure investment can be a tool used by governments to affect this distance, where, in doing so, they induce agglomeration economies and increase economic growth. In this paper, we will discuss the importance of considering types of networks when analysing agglomeration economies using multiregional new economic geography (NEG)-based spatial general equilibrium models. These models typically use abstract bi-regional origin-destination networks to describe the cost of transporting or commuting between regions. These abstract networks are like tunnels between regions and do not take into account the actual roads in real infrastructure networks used for transport and traffic between destinations. In other words, in real infrastructure networks, which we label full networks, people and goods move from one region to another via actual roads and possibly via third regions. In the empirical economic literature, there is a significant difference between the economic effect of changes in a bi-regional origin-destination network and the economic effect of changes in a full network. To date, no systematic explanation has been given for this difference in the size of the effects. Lack of an explanation for this difference may lead to confusion among policy-makers who have to decide on infrastructure investment. In this methodological paper, we discuss the reason for this difference. We do not discuss the absolute size of the agglomeration effects, only the relative difference that exists when using different types of networks. In order to explain the difference, we introduce a methodology that translates the effects in a bi-regional origin-destination network into similar effects in a full network, making it possible to systematically compare the economic importance of all links (roads) in such a network. This is highly relevant to policy-makers, who can now interpret the model results on a real full infrastructure network. We will also show the mathematical relationship between the importance of agglomeration economies on a link in a full network and the importance of agglomeration economies on a link in a bi-regional origin-destination network. Finally, the methodology is illustrated with a case study from the Netherlands. [ABSTRACT FROM AUTHOR]

This paper evaluates the economic impact of the $14 billion preparatory infrastructure investments for the 2010 FIFA World Cup in South Africa. We use satellite data on night light luminosity at municipality and electoral district level as a proxy for economic activity, applying synthetic control methods for estimation. For the average World Cup municipality, we find significantly positive, short‐run effects before the tournament, corresponding to a reduction of unemployment by 1.3 percentage points. At the electoral district level, we reveal distinct effect heterogeneity, where especially investments in transport infrastructure are shown to have long‐lasting, positive effects, particularly in rural areas. [ABSTRACT FROM AUTHOR]

In this paper, we use a VAR approach to investigate the effects of public investment in transportation infrastructures on private investment, employment, and output in Portugal. Estimation results suggest that public investment crowds in private investment and employment, and has a strong positive effect on output. We estimate that one euro in public investment increases output in the long-term by 9.5 euros, which corresponds to a rate of return of 15.9%. These figures imply that there are strong long-term budgetary benefits from public investment in the form of increased future tax revenues. A closer look at the effects of different types of public investment uncovers the same general patterns. These results are very important from a public policy perspective. They suggest that the strategy followed by the Portuguese authorities of investing in public infrastructures is justified, both from a long-term development perspective and a long-term public budgetary perspective. [ABSTRACT FROM AUTHOR]

This paper develops a growth model with a public sector and a human capital sector to explore the impact of social infrastructure on investment in physical capital, the accumulation of skills, output, and consumption. We show that the implications of the model are consistent with the empirical observations of ). Economies where government policies and institutions encourage production over diversion have a larger ‘stock’ of social infrastructure, conditional on population size and sophistication of diversion technologies, which raises output per worker by increasing the extent of participation in market, rather than diversive, activities. The magnitude of these effects depends on economic agents’ inherent propensity for rent-seeking. In addition, economies with unstable governments may suffer from an under-provision of social infrastructure and, consequently, have reduced levels of capital and output per worker. [ABSTRACT FROM AUTHOR]

In this paper we put to trial the alleged role of investment in transport and communications infrastructure in economic growth in the Netherlands in the second half of the nineteenth century. To do so, we combine a new data set with data-oriented econometric techniques. Testing of the main hypothesis by applying Granger's concept of causation in a vector auto-regression model reveals that the development of infrastructure 'caused' Dutch economic growth. In order to investigate the underlying mechanisms, we enhance the basic model with impulse-response analysis. This leads to a clear response pattern of GDP to a change in transport infrastructure investment. The response of GDP is explained as being induced by three underlying mechanisms: 1. Positive forward linkage effects (mainly through reductions in the costs of transport and communications). 2. Positive backward linkage effects (mainly through expenditure and income effects). 3. Negative transitional dynamics (mainly through changes in the spatial setting of the economy). [ABSTRACT FROM AUTHOR]

When considering how to allocate scarce resources for the development of public infrastructure, many countries have a tendency to neglect maintenance in favor of new infrastructure investment projects. We examine the role of maintenance expenditures on output and on the distribution of wealth in a heterogeneous agents model. In our model, maintenance affects the quality of existing infrastructure and thus the flow of services derived from it. Furthermore, maintenance expenditures also affect the depreciation rates of both public infrastructure and private capital. We calibrate our model to Mexico and consider several policies that increase the flow of resources to infrastructure and find that a policy that allocates all additional resources to new investment is dominated by policies that allocate at least some of the additional resources to maintenance. Specifically, focusing all additional resources on maintenance is shown to generate the largest reduction in inequality, while a more balanced policy that increases both investment and maintenance maximizes output growth. ( JEL E00, E62, H54) [ABSTRACT FROM AUTHOR]

This study proposes to investigate the threshold effects in the productivity of infrastructure investment in developing countries. It concludes to their presence in the relationship between output and private and public inputs as well as network effects in the productivity of infrastructure. When the available stock of infrastructure is low, investment has the same productivity as non-infrastructure investment. On the contrary, when a minimum network is available, the marginal productivity of infrastructure investment is greater than the productivity of other investments. Finally, when the main network is achieved, its marginal productivity becomes similar to the productivity of other investment. [ABSTRACT FROM AUTHOR]

Reforms to Australia's 45,000 MW electricity market were met with remarkable success, but wholesale market gains have been largely exhausted. Above-trend growth in investment in energy infrastructure is driving retail prices to levels that triggered the sectoral assault in the first place. This pressure should initiate the last piece of the reform puzzle-removing price regulation, installing smart meters and implementing dynamic pricing to halt the primary cause of the problem, rapidly rising peak demand. We find that such a change can lead to non-trivial reductions in household peak demand, with our sample load factor improving by 9 percentage points. [ABSTRACT FROM AUTHOR]

This article reviews the arguments for promoting private investment in infrastructure as a basis for poverty reduction in developing countries. It describes the experience leading to the development of international ‘facilities’ intended to address impediments to private investment. It then explores three ‘levels’ of literature: that of the facilities themselves, of donor organisations, and of academic authors. At each, it investigates the rationale and causal pathways leading from support for private investment to pro-poor outcomes. It finds there is a possible but not necessary association between private investment, economic growth and poverty reduction, but the causal chain is poorly understood. It proposes the development of such a causal framework. [ABSTRACT FROM AUTHOR]

Within current poverty reduction programmes, focus on the social-welfare millennium development goals is widening to embrace a concern with infrastructural investment, particularly for remote areas. The previously popular assumption that rural disadvantage can be remedied by road-building is resurfacing. Using survey data from Ethiopia, Zambia and Vietnam, this article explores how effective such investment is in addressing mobility and social-service accessibility in rural areas. The findings indicate that, in extremely remote areas, road improvements may catalyse the expansion of social-service provision, as evidenced in Ethiopia. However, given the poor's relative lack of motor vehicles and ability to pay for public transport, they are, by no means, a sufficient condition for enhancing the mobility of the rural poor. [ABSTRACT FROM AUTHOR]

Understanding the impact of road investments on deforestation is part of a complete evaluation of the expansion of infrastructure for development. We find evidence of spatial spillovers from roads in the Brazilian Amazon: deforestation rises in the census tracts that lack roads but are in the same county as and within 100 km of a tract with a new paved or unpaved road. At greater distances from the new roads the evidence is mixed, including negative coefficients of inconsistent significance between 100 and 300 km, and if anything, higher neighbor deforestation at distances over 300 km. [ABSTRACT FROM AUTHOR]