Abstract

This paper estimates the impact of the Golden Quadrilateral and North-South-East-West Highways in India on welfare, social inclusion, and environmental quality. The analysis uses district-level data for 1994-2011 and the difference-in-difference method. The results suggest that the highways shifted employment from the farm to the nonfarm sector, and that this shift was accompanied by an increase in output per capita. However, there is no evidence of an impact on household expenditure per capita, the poverty rate, or the incidence of regular wage employment. The results suggest that the highways caused an increase in air pollution. The effects of the highways are heterogeneous, depending on conditions in local factor and product markets. Document type: Book

Abstract

Infrastructure is viewed as a crucial ingredient to foster growth and productivity. Amid the post -- global financial crisis slowdown, Sub-Saharan Africa is in dire need to continue the growth momentum it experienced during the period of the Africa Rising narrative. An emerging consensus in the empirical literature is that, under the right circumstances, an adequate supply of infrastructure can help foster growth in the region. This paper provides a scorecard on infrastructure development in Sub-Saharan Africa over the past decades along four sectors (telecommunications, electric power, transportation, and water and sanitation) and three dimensions (quantity, quality, and access). First, it documents the existence of a large gap in infrastructure in the region—although the magnitude of the gap depends on the sector, dimension, and country/group. Second, the potential growth benefits from closing the infrastructure gap are large. Third, the infrastructure financing needs are very large, and the public sector so far is unable to meet these needs. Other options that involve the private sector may be available for the region. Finally, there is room for improving the efficiency of public infrastructure spending (that is, the quality of public investment management systems and procurement methods), which, in turn, may increase the output multiplier of investment spending. Document type: Book

Abstract

There is a long-standing debate over whether new roads unavoidably lead to environmental damage, especially forest loss, but causal identification has been elusive. Using multiple causal identification strategies, this paper studies the construction of new rural roads to over 100,000 villages and the upgrading of 10,000 kilometers of national highways in India. The new rural roads had precise zero effects on local deforestation. In contrast, the highway upgrades caused substantial forest loss, which appears to be driven by increased timber demand along the transportation corridors. In terms of forests, last mile connectivity had a negligible environmental cost, while expansion of major corridors had important environmental impacts. Document type: Book

Abstract

Transport connectivity is among the most important factors in increasing firm productivity and accelerating economic development. The literature generally supports the idea of agglomeration economies, although there is little evidence of their effectiveness in Africa. There are often empirical challenges, such as spatial externalities and endogeneity of infrastructure development. Using firm registry data in Liberia, this study used the instrumental variable spatial autoregressive model to examine the effects of transport connectivity on firms' decisions on where to locate. The study found significant spatial autocorrelation and possible endogeneity related to transport infrastructure, and that firms are more likely to be located where market accessibility is better. The data indicated strong agglomeration economies, indicating that the primary city, Monrovia, is likely to continue to grow and attract more people and firms, and that secondary cities can also grow with greater transport connectivity between populated areas, such as district centers. Document type: Book

Abstract

This paper presents the details of three scenarios -- leapfrog, lock-in, and lopsided -- that describe an illustrative set of technological states. Based largely on expert interviews, the paper argues that the technology outcomes are heavily attributable to the actions (or in some cases, inaction) of policy makers and incumbents. For each scenario, the paper presents descriptive levels of technology achievement and market outcomes for the energy, transport, and water sectors. One of the central differentiating features of the three scenarios is the extent to which governments perform their roles as enabling, that is, whether the policies are designed to help or hinder innovations that improve service levels, and distributive, that is, whether the policies are designed to ensure that multiple segments of society reap the rewards of innovation. A question raised as part of that theme is how countries can avoid lock-in, or how they might become derailed into a lopsided scenario. Some institutional behavioral markers of the scenarios were identified in these discussions and are noted in the paper. It is important to recognize that multiple combinations of these behaviors can lead to a lock-in or lopsided scenario. In addition to describing the scenarios in detail, the paper discusses the rationale for their creation, along with a brief discussion on the nature of uncertainty. The paper also describes the methodology employed in the creation of the scenarios, including expert interview methods and a day-long workshop. Document type: Book

Abstract

Beyond the Gap: How Countries Can Afford the Infrastructure They Need while Protecting the Planet aims to shift the debate regarding investment needs away from a simple focus on spending more and toward a focus on spending better on the right objectives, using relevant metrics. It does so by offering a careful and systematic approach to estimating the funding needs to close the service gaps in water and sanitation, transportation, electricity, irrigation, and flood protection. Exploring thousands of scenarios, this report finds that funding needs depend on the service goals and policy choices of low- and middle-income countries and could range anywhere from 2 percent to 8 percent of GDP per year by 2030. Beyond the Gap also identifies a policy mix that will enable countries to achieve key international goals—universal access to water, sanitation, and electricity; greater mobility; improved food security; better protection from floods; and eventual full decarbonization—while limiting spending on new infrastructure to 4.5 percent of GDP per year. Importantly, the exploration of thousands of scenarios shows that infrastructure investment paths compatible with full decarbonization in the second half of the century need not cost more than more-polluting alternatives. Investment needs remain at 2 percent to 8 percent of GDP even when only the decarbonized scenarios are examined. The actual amount depends on the quality and quantity of services targeted, the timing of investments, construction costs, and complementary policies. Finally, investing in infrastructure is not enough; maintaining it also matters. Improving services requires much more than capital expenditure. Ensuring a steady flow of resources for operations and maintenance is a necessary condition for success. Good maintenance also generates substantial savings by reducing the total life-cycle cost of transport and water and sanitation infrastructure by more than 50 percent. Document type: Book

Abstract

Governments worldwide face the difficult challenge of deciding which infrastructure projects to prioritize and select for implementation, given the limits of available funding and the need to attain their developmental goals. The key objective of this report is to conduct a comparative exercise between the World Bank's Infrastructure Prioritization Framework, a multicriteria analysis–based methodology to project prioritization, and a more complex cost-benefit analysis–based approach. The report focuses on Chile, which has a well-institutionalized evaluation process that uses cost-benefit analysis to assess projects on their quality and ability to generate value for money. The analysis compares the results of the Infrastructure Prioritization Framework alongside Chile's current cost-benefit analysis–based and multicriteria analysis approaches to the same subsets of projects in the road transport and water reservoir subsectors, respectively. The results show that the Infrastructure Prioritization Framework has application beyond its original proposition and can complement a traditional cost-benefit analysis by directly considering social and environmental policy goals that are otherwise difficult to quantify in a cost-benefit analysis. The analysis also finds that in Chile there is a discrepancy between the stated goals and objectives of the appraisal system and the actual implementation. In the case of transport sector projects, there is an evident deviation between cost-benefit analysis–based selection policy and actual decisions made for project implementation. In the case of water catchment selection, there is a bias toward projects with higher financial-economic performance as compared to social-environmental performance, despite policy intentions to afford consideration to environmental and social development goals. Document type: Book

Abstract

Like in many large cities in developing countries, traffic in Grand Casablanca, Morocco, is congested and public buses are crowded. These conditions are alleviated by a combination of supply-side infrastructure expansions, such as more buses and new road capacity, and demand-side pricing instruments, such as parking and fuel taxes. Using an empirical urban transportation mode choice model for Casablanca, this study finds a mix of these expansion policies and pricing instruments to alleviate congestion and maximize aggregate social welfare. The optimal mix is sensitive to the marginal costs of the infrastructure expansions. If the city were to spread out in its periphery where land constraints do not exist and land is available at lower prices, a supply-side instrument, particularly the optimal expansion of roads, would be far more effective in achieving welfare gains than the use of optimal pricing instruments without new roads. By contrast, if the city were to densify in already built-up areas, land and other physical constraints and the high price of land may leave expensive “elevated roads” as the only option. In this case, demand-side instruments together with the elevated roads would equally contribute to reduce traffic congestion and in-bus crowding. Document type: Book

Abstract

Efficient energy services are essential for economic growth, competitiveness, and human development. Globally, energy markets are undergoing a transformation: fossil fuel prices are responding to new and unpredictable dynamics, and new energy and information and communication technologies (ICT) are emerging and disrupting traditional market architectures. The 2030 development agenda for sustainable development adopted in September 2015 by the 193 countries of the United Nations General Assembly establishes sustainable energy as number seven of its 17 sustainable development goals (SDG7). It seeks to ensure access to affordable, reliable, sustainable, and modern energy for all. While much of the finance will have to come from the private sector, public finance - both national budgets and concessional transfers - will have a crucial role to play in helping set economies on the right path. So in this increasingly complex and rapidly changing context, how are Latin America and Caribbean (LAC) energy markets progressing? How will emerging disruptions and game changers influence the evolution and transformation of energy markets in LAC? How ready are existing markets and institutions to actively move toward the next frontiers of efficiency? What is needed to break through to the modern, efficient, secure, and sustainable energy systems needed to support the regional economy in the coming years? What investment will be needed and how is LAC poised to attract private finance? This report explores these questions and offers insights into paths and indicative actions needed to approach the next efficiency frontier. The report focuses on electricity and gas markets. The analysis acknowledges the varying conditions and challenges of different countries in the region. Intraregional variation is addressed through analysis of country groupings and selection of appropriate comparators, benchmarks, and best practice frontiers.

Abstract

Transport accessibility is an important driver of urban growth and key to the sustainable development of cities. This paper presents a simple GIS-based tool developed to allow the rapid analysis of accessibility by different transport modes. Designed to be flexible and use publicly-available data, this tool (built in ArcGIS) uses generalized cost to measure transport costs across networks including monetary and distance components. The utility of the tool is demonstrated on London, UK, showing the differing patterns of accessibility across the city by different modes. It is shown that these patterns can be examined spatially, by accessibility to particular destinations (e.g., employment locations), or as a global measure across a whole city system. A number of future infrastructure scenarios are tested, examining the potential for increasing the use of low-carbon forms of transport. It is shown that private car journeys are still the least cost mode choice in London, but that infrastructure investments can play a part in reducing the cost of more sustainable transport options. Document type: Article