Edited by Biswa Nath Bhattacharyay, Masahiro Kawai and Rajat M. Nag
Chapter 3: Benefits of infrastructure investment: an empirical analysis
Rapid trade expansion has been a key driver of the economic success of East and Southeast Asian countries over recent decades. Substantial reform has liberalized trade and foreign direct investment regimes, and rapid technological progress has lowered transportation and communications costs. In addition, the development of infrastructure in Asian countries has made an important contribution to their integration into the world economy. The level of infrastructure development in most developing Asian countries is still relatively low, however. The significant dependence on foreign trade and bright long-term growth prospects of these countries suggest the potential for substantial gains from investment in regional infrastructure in Asia. Moreover, the development of regional infrastructure that strengthens the links between Asian economies and with the rest of the world is likely to stimulate wider economic participation of the poorest economies in the region.
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