Elgar original reference
Edited by Roberta Capello and Peter Nijkamp
Johannes Bröcker and Piet Rietveld 9.1 Introduction Regional development is the result of mutually related decisions made by private and public actors. In the present chapter we will focus on one particular type of decision: the provision of infrastructure, mainly by the public sector, but also possibilities for private supply will be explored. The impacts will be measured in particular in terms of productivity and welfare. The main type of infrastructure to be studied here is transport infrastructure, but many of the results will also apply to other infrastructure types. Regional impacts of infrastructure supply are of interest for two reasons. First, infrastructure investment plans are often motivated by regional policy goals. They are intended to beneﬁt lagging regions. Hence, assigning beneﬁts to regions is vital in this context. Second, assessing beneﬁts by regions is needed for assigning the planning and decision responsibility as well as the ﬁnancial burden in a proper way. Local jurisdictions should decide upon projects not having signiﬁcant spillovers to other jurisdictions, and they should fully pay for them. In case of spillovers, decentralized solutions are still possible through negotiations of jurisdictions, as advocated by Coase. In this case local decisionmakers should at least have a rough idea about who gains what, in order to attain an agreement about projects that generate enough beneﬁt to make the citizens of all jurisdictions involved better oﬀ. Transaction costs make a decentralized agreement impracticable, however, if too many jurisdictions are involved. Either decision-making...
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