Abstract

The connections between transport infrastructure and economic development have been extensively analyzed in previous research, but little is known about the cost of infrastructure investments in poor countries. This paper examines drivers of unit costs of construction and maintenance of transport infrastructure in low and middle income countries and documents that: (i) there is a large dispersion in unit costs for comparable road work activities; (ii) after accounting for environmental drivers of costs, residual unit costs are significantly higher in conflict countries; (iii) there is evidence that costs are higher in countries with higher levels of corruption; (iv) these effects are robust to controlling for a country’s public investment capacity and business environment. Our findings have implications for governments aiming to increase connectivity in poor countries. Document type: Book

Abstract

Tajikistan is one of the world's most remittance-dependent economies, receiving net remittance inflows equivalent to approximately 40 percent of Gross Domestic Product (GDP). Falling remittance inflows was one of the main transmission channels through which the 2008-09 global economic crisis adversely impacted the economy. Conversely, the pickup in growth since 2009 can also be traced to the rebound in remittance inflows (primarily from Russia, where more than 90 percent of Tajik migrants work), which reached 42 percent of GDP in 2010 and an estimated 40 percent of GDP in 2011. As the World Bank's 2011 country economic memorandum has argued, future growth in Tajikistan will depend crucially on increasing efficiency and raising private investment rates. Remittances are likely to grow more slowly than the earlier trend over the last 5-6 years, but could nonetheless be a major contributor to future growth if more go into private investment than in the past.