Studies in Modelling and Decision Support, Second Edition
Edited by M. A. Quaddus and M. A.B. Siddique
Chapter 14: Infrastructure development as a policy lever for sustainable development
Infrastructure investment is an important expenditure instrument employed by developing country governments over the past 40 years to affect economic development (Krueger, 1992). A World Bank study examining a cross-section of developing countries shows that infrastructure typically represents about 20 percent of their total investment and 40 to 60percent of their public investment. Although private sector participation in infrastructure services delivery is on the rise, its volume remains under 10 percent of the total annual outlay (World Bank, 1994). Since the governments in most developing countries do not have the necessary institutions to implement many fiscal policies to facilitate economic growth and influence income distribution, infrastructure development is often seen as an effective tool to achieve those ends, albeit its performance has varied widely (Van de Walle and Nead, 1995; Boadway and March and, 1995). The spread of benefits of infrastructure investment has also been quite limited in most developing countries.
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