Infrastructure’s Role in Lowering Asia’s Trade Costs

Infrastructure’s Role in Lowering Asia’s Trade Costs

Building for Trade

ADBI series on Asian Economic Integration and Cooperation

Edited by Douglas H. Brooks and David Hummels

This book analyses and draws policy implications from infrastructure’s central role in lowering Asia’s trade costs.


Masahiro Kawai

Subjects: asian studies, asian development, development studies, asian development, development economics, economics and finance, development economics


Trade-related infrastructure has given Asia’s economies access to, and made them accessible for, trade with the rest of the world. Growth has both followed from and contributed to this process. The same has become true for regional cooperation and integration. The Asian Development Bank (ADB) and its subsidiary for research and capacity-building, the ADB Institute (ADBI), have contributed to expansion of the region’s infrastructure and understanding of how that infrastructure contributes to trade and resulting growth in the region. While trade is primarily a private sector activity, much of it relies on infrastructure which, in turn, is primarily financed by the public sector in acknowledgement of trade’s contribution to growth, development and poverty reduction. Infrastructure, both physical and institutional, facilitates trade by lowering the costs of moving goods, information and payments from economic agents in one country to those in another. As tariff barriers have fallen in successive GATT/WTO (General Agreement on Tariffs and Trade/World Trade Organization) rounds of negotiations, infrastructure-related trade costs have become comparatively more important. At the same time, production and trade patterns have evolved as technology and infrastructure have lowered absolute and relative trade costs while timeliness of delivery has increased in importance as a factor in demand. Most of the analysis of infrastructure’s impact on trade costs has focused on conditions in more developed countries. This volume contributes to our understanding by examining the situation in developing Asia, the world’s most populous and fastest-growing region. Chapters explore topics ranging from Asian trade patterns and trade...