The effects of infrastructure development on growth and income distribution / Cesar Calderon and Luis Serven.

Format:

Book

Government document

Author/Creator:

Calderón, César.

Contributor:

World Bank.

Serven, Luis.

Series:

Policy research working papers ; 3400.

World Bank e-Library.

Policy research working paper ; 3400

Language:

English

Subjects (All):

Economic development.

Income distribution.

Infrastructure (Economics).

Other Title:

Policy research working paper vol. 3400

Place of Publication:

[Washington, D.C. : World Bank, 2004]

System Details:

data file

Summary:

"Calderon and Serven provide an empirical evaluation of the impact of infrastructure development on economic growth and income distribution using a large panel data set encompassing over 100 countries and spanning the years 1960-2000. The empirical strategy involves the estimation of simple equations for GDP growth and conventional inequality measures, augmented to include, among the regressors, infrastructure quantity and quality indicators, in addition to standard controls. To account for the potential endogeneity of infrastructure (as well as that of other regressors), the authors use a variety of generalized-method-of-moments (GMM) estimators based on both internal and external instruments and report results using both disaggregated and synthetic measures of infrastructure quantity and quality. The two robust results are: (1) growth is positively affected by the stock of infrastructure assets, and (2) income inequality declines with higher infrastructure quantity and quality. A variety of specification tests suggests that these results do capture the causal impact of the exogenous component of infrastructure quantity and quality on growth and inequality. These two results combined suggest that infrastructure development can be highly effective to combat poverty. Furthermore, illustrative simulations for Latin American countries suggest that these impacts are economically quite significant and highlight the growth acceleration and inequality reduction that would result from increased availability and quality of infrastructure. This paper a joint product of the Finance, Private Sector, and Infrastructure Department and the Office of the Chief Economist, Latin America and the Caribbean Region is part of a larger effort in the region to assess the effects of infrastructure development"--World Bank web site.

Notes:

Title from PDF file as viewed on 9/8/2004.

Includes bibliographical references.

Publisher Number:

10.1596/1813-9450-3400