Abstract

Infrastructure plays a key role in promoting economic growth and opportunities.In particular, the efficient provision of basic infrastructure services, like water and sanitation, is a key ingredient in fostering a country's social and economic development. Previous studies have found that infrastructure has a positive impact on output, and can improve economic opportunity, including health and education for the poor, particularly in developing countries. In Argentina, a 2005 study, found that child mortality fell by 8 percent in areas that had experienced improved coverage and quality of basic water and sanitation through utility reform, with most of the reduction occurring in low-income areas where the water network expanded the most. More generally, Fay and Morrison found that allowing the poorest quintile in developing countries the same access to basic services as the richest quintile would reduce child mortality by 8 percent and child under development by 14 percent. Calderon and Serven also found a significant positive impact of infrastructure access and quality on overall inequality. Furthermore, the book sheds some light on how to address the main challenge for the future which may be to attract specialized operators to the smaller municipalities which do not currently have them. For that purpose in Colombia, for example, over the last two years, the policy framework has been focused on promoting the sector's development, by using the departments as the intermediate institutional level between the National Government and the municipalities, to formulate programs with regional impact and promote comprehensive investment plans. Document type: Book

Abstract

Infrastructure services are significant determinants of economic development, social welfare, trade, and public health. As such, they typically feature strongly in national development plans. While governments may receive many infrastructure project proposals, however, resources are often insufficient to finance the full set of proposals in the short term. Leading up to 2020, an estimated US$836 billion - 1 trillion will be required each year to meet growth targets worldwide (Ruiz-Nunez and Wei, 2014; World Bank). Global estimates of infrastructure investments required to support economic growth and human development lie in the range of US$65-70 trillion by 2030 (OECD, 2006), while the estimated pool of available funds is limited to approximately US$45 trillion (B20, 2014). The past twenty years have also seen a shift towards decentralized infrastructure planning. Many subnational governments, regional entities, and sector agencies have been delegated responsibility for infrastructure planning promote local responsiveness, but responsibility for allocating funds often remains with a centralized finance agency (CFA). While constituencies may propose numerous projects, governments often have insufficient financial resources to implement the full suite of proposals. This report presents the IPF methodology and results of the pilot application to a select set of transport and water and sanitation projects in Panama. The report first gives background information on infrastructure prioritization in Panama, then follows with a description of the IPF in technical and implementation terms. Next, we present the results of the pilot and close with recommendations for implementing IPF to a wider set of projects.