IDEAS home Printed from https://ideas.repec.org/a/sae/emeeco/v3y2011i1p59-110.html
   My bibliography  Save this article

Requirements for Infrastructure Investment in Latin America Under Alternate Growth Scenarios

Author

Listed:
  • Harpaul Alberto Kohli

    (Harpaul Alberto Kohli is Manager of Information Analytics at the Centennial Group International and Emerging Markets Forum. E-mail: harpaul@hcs.harvard.edu)

  • Phillip Basil

    (Phillip Basil is a Sr Business Development Analyst in Reston, VA and a former Sr Research Assistant at the Federal Reserve Board. E-mail: phillip.basil@gmail.com)

Abstract

This study estimates requirements for infrastructure investment in 21 Latin American countries for the period 2011–2040 using a structural equation model. Needs total about 4 percent of GDP. Projections are provided for both a high-growth convergence scenario and a low-growth business-as-usual scenario. These costs represent minimum investments necessary to support expected economic growth. Costs are presented separately and in total for new-capacity investment and maintenance for 10 sectors: airports, electricity, fixed broadband, landlines, mobile telephony, ports, rail, paved roads, sanitation, and water. Country coverage comprises Argentina, Belize, Bolivia, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, El Salvador, Guatemala, Guyana, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, Suriname, Uruguay, and Venezuela. The model differs from past studies of regionwide long-term infrastructure investment needs in five features: (1) It considers alternate GDP growth scenarios; (2) It employs a structural equation model using instrumental variables to provide unbiased, consistent projections for both GDP growth scenarios (Instrumented variables are urbanization and the shares in GDP of agriculture, manufacturing, and services); (3) Mobile phone investment costs are not constant but instead vary with population density; (4) Two additional, wealthier countries are included in modeling to prevent forecasting outside the range of the independent variables’ values used to construct the model, and; (5) Timing of new-capacity investments is distributed over multiple years and varies by sector.

Suggested Citation

  • Harpaul Alberto Kohli & Phillip Basil, 2011. "Requirements for Infrastructure Investment in Latin America Under Alternate Growth Scenarios," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 3(1), pages 59-110, January.
    • Handle: RePEc:sae:emeeco:v:3:y:2011:i:1:p:59-110
    DOI: 10.1177/097491011000300103
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/097491011000300103
    Download Restriction: no
    File URL: https://libkey.io/10.1177/097491011000300103?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Huang, Wenyong & Yu, Huachun & Wang, Fuying & Li, Guanchong, 1997. "Infant mortality among various nationalities in the middle part of Guizhou, China," Social Science & Medicine, Elsevier, vol. 45(7), pages 1031-1040, October.
    2. Fay, Marianne & Yepes, Tito, 2003. "Investing in infrastructure : what is needed from 2000 to 2010?," Policy Research Working Paper Series 3102, The World Bank.
    3. Asian Development Bank & World Bank & Japan Bank for International Cooperation, 2005. "Connecting East Asia : A New Framework for Infrastructure," World Bank Publications - Books, The World Bank Group, number 7267.
    4. Shahidur R. Khandker & Zaid Bakht & Gayatri B. Koolwal, 2009. "The Poverty Impact of Rural Roads: Evidence from Bangladesh," Economic Development and Cultural Change, University of Chicago Press, vol. 57(4), pages 685-722, July.
    5. Caf, . "Latin America 2040," Books, CAF Development Bank Of Latinamerica, number 497.
    6. Ward Romp & Jakob De Haan, 2007. "Public Capital and Economic Growth: A Critical Survey," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 8(S1), pages 6-52, April.
    7. Marianne Fay & Mary Morrison, 2007. "Infrastructure in Latin America and the Caribbean : Recent Developments and Key Challenges," World Bank Publications - Books, The World Bank Group, number 7179.
    8. Harpaul Alberto Kohli, 2013. "Infrastructure Needs for a Resurgent Latin America," Book Chapters, in: Harinder Kohli & Claudio Loser & Anil Sood (ed.), Latin America 2040 — Breaking Away from Complacency: An Agenda for Resurgence, edition 2, chapter 7, pages 229-238, Emerging Markets Forum.
    9. Indermit Gill & Homi Kharas, 2007. "An East Asian Renaissance : Ideas for Economic Growth," World Bank Publications - Books, The World Bank Group, number 6798.
    10. Mu, Ren & van de Walle, Dominique, 2007. "Rural roads and poor area development in Vietnam," Policy Research Working Paper Series 4340, The World Bank.
    11. Kalaitzidakis, Pantelis & Kalyvitis, Sarantis, 2004. "On the macroeconomic implications of maintenance in public capital," Journal of Public Economics, Elsevier, vol. 88(3-4), pages 695-712, March.
    12. Mikko Myrskylä & Hans-Peter Kohler & Francesco C. Billari, 2009. "Advances in development reverse fertility declines," Nature, Nature, vol. 460(7256), pages 741-743, August.
    13. Homi Kharas, 2010. "The Emerging Middle Class in Developing Countries," OECD Development Centre Working Papers 285, OECD Publishing.
    14. World Bank, 2010. "World Development Indicators 2010," World Bank Publications - Books, The World Bank Group, number 4373.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Marcelo Selowsky & Claudio Loser, 2015. "Improving Microeconomic Efficiency of Latin American Economies," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 7(2), pages 121-149, May.
    2. Ruiz Nunez,Fernanda & Wei,Zichao, 2015. "Infrastructure investment demands in emerging markets and developing economies," Policy Research Working Paper Series 7414, The World Bank.
    3. Galindo Paliza, Luis Miguel & Hoffmann, Bridget & Vogt-Schilb, Adrien, 2022. "How Much Will It Cost to Achieve the Climate Goals in Latin America and the Caribbean?," IDB Publications (Working Papers) 11983, Inter-American Development Bank.
    4. Claudio Loser & José Fajgenbaum, 2012. "A New Vision for Mexico 2042: Achieving Prosperity for All," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 4(2), pages 155-195, May.
    5. Harpaul Alberto Kohli & Y. Aaron Szyf & Drew Arnold, 2012. "Construction and Analysis of a Global GDP Growth Model for 185 Countries through 2050," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 4(2), pages 91-153, May.
    6. Luis Miguel Galindo Paliza & Bridget Hoffman & Adrien Vogt-Schilb, 2022. "How Much Will It Cost to Achieve the Climate Goals in Latin America and the Caribbean? [¿Cuánto costará lograr los objetivos del cambio climático en América Latina y el Caribe?]," Post-Print halshs-03720397, HAL.
    7. Fuss, Sabine & Chen, Claudine & Jakob, Michael & Marxen, Annika & Rao, Narasimha D. & Edenhofer, Ottmar, 2016. "Could resource rents finance universal access to infrastructure? A first exploration of needs and rents," Environment and Development Economics, Cambridge University Press, vol. 21(6), pages 691-712, December.
    8. Jorge Davalos & Jean-Marc Montaud & Nicolas Pecastaing, 2019. "Potential effect of Scaling-up Iinfrastructure in Peru: a general equilibrium model-bases analysis," Working Papers hal-02937833, HAL.
    9. Jorge Luis Sanchez Arevalo & Edgard Monforte Merlo, 2020. "Social-economic Analysis of Physical Integration between Brazil and Peru: Focus for the Regions Linked to the Interoceanic Highway," International Journal of Economics and Financial Issues, Econjournals, vol. 10(3), pages 102-110.
    10. Jean-Marc Montaud & Jorge Dávalos & Nicolas Pécastaing, 2020. "Potential effects of scaling-up infrastructure in Peru: a general equilibrium model-based analysis," Applied Economics, Taylor & Francis Journals, vol. 52(27), pages 2895-2912, May.
    11. Claudio Loser & José Fajgenbaum, 2012. "A New Vision for Mexico 2042: Achieving Prosperity for All," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 4(2), pages 155-195, May.
    12. Harinder Kohli & Claudio Loser & Anil Sood (ed.), 2013. "Latin America 2040 — Breaking Away from Complacency: An Agenda for Resurgence — Second Edition," Books, Emerging Markets Forum, edition 2, number latam2040v2, May.
    13. Harpaul Alberto Kohli & Natasha Mukherjee, 2011. "Potential Costs to Asia of the Middle Income Trap," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 3(3), pages 291-311, September.
    14. Claudio Loser & Anil Sood, 2011. "Breaking away from Mediocre Complacency to a Prosperous Future," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 3(1), pages 5-58, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Harpaul Alberto Kohli & Phillip Basil, 2011. "Requirements for Infrastructure Investment in Latin America Under Alternate Growth Scenarios: 2011–2040," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 3(1), pages 59-110, January.
    2. Harpaul Alberto Kohli & Natasha Mukherjee, 2011. "Potential Costs to Asia of the Middle Income Trap," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 3(3), pages 291-311, September.
    3. Straub, Stephane, 2008. "Infrastructure and growth in developing countries : recent advances and research challenges," Policy Research Working Paper Series 4460, The World Bank.
    4. Harinder Kohli & Claudio Loser & Anil Sood (ed.), 2013. "Latin America 2040 — Breaking Away from Complacency: An Agenda for Resurgence — Second Edition," Books, Emerging Markets Forum, edition 2, number latam2040v2, May.
    5. Harpaul Alberto Kohli & Y. Aaron Szyf & Drew Arnold, 2012. "Construction and Analysis of a Global GDP Growth Model for 185 Countries through 2050," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 4(2), pages 91-153, May.
    6. Calderon, Cesar & Serven, Luis, 2008. "Infrastructure and economic development in Sub-Saharan Africa," Policy Research Working Paper Series 4712, The World Bank.
    7. John Gibson & Felix Rioja, 2017. "Public Infrastructure Maintenance And The Distribution Of Wealth," Economic Inquiry, Western Economic Association International, vol. 55(1), pages 175-186, January.
    8. Claudio Loser & José Fajgenbaum, 2012. "A New Vision for Mexico 2042: Achieving Prosperity for All," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 4(2), pages 155-195, May.
    9. Ward Romp & Jakob De Haan, 2007. "Public Capital and Economic Growth: A Critical Survey," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 8(S1), pages 6-52, April.
    10. Giulia FELICE, 2009. "Size and composition of public investment, structural change and growth," Departmental Working Papers 2009-28, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano, revised 27 Dec 2011.
    11. Labonne, Julien & Chase, Robert S., 2010. "A road to trust," Journal of Economic Behavior & Organization, Elsevier, vol. 74(3), pages 253-261, June.
    12. Thapa, Ganesh & Shively, Gerald, 2018. "A dose-response model of road development and child nutrition in Nepal," Research in Transportation Economics, Elsevier, vol. 70(C), pages 112-124.
    13. Zhang Yunling, . "Role of Regional Institutions in East Asia," Chapters, in: Zhang Yunling & Fukunari Kimura & Sothea Oum (ed.), Moving Toward A New Development Model For East Asia-The Role of Domestic Policy and Regional Cooperation, chapter 11, pages 337-365, Economic Research Institute for ASEAN and East Asia (ERIA).
    14. Stifel, David & Minten, Bart, 2017. "Market Access, Well-being, and Nutrition: Evidence from Ethiopia," World Development, Elsevier, vol. 90(C), pages 229-241.
    15. Santos, Georgina & Behrendt, Hannah & Teytelboym, Alexander, 2010. "Part II: Policy instruments for sustainable road transport," Research in Transportation Economics, Elsevier, vol. 28(1), pages 46-91.
    16. World Bank Group, "undated". "Africa's Pulse, No. 14, October 2016," World Bank Publications - Reports 25097, The World Bank Group.
    17. Max Franks & Ottmar Edenhofer & Kai Lessmann, 2017. "Why Finance Ministers Favor Carbon Taxes, Even If They Do Not Take Climate Change into Account," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 68(3), pages 445-472, November.
    18. Garroway, Chris & Hacibedel, Burcu & Reisen, Helmut & Turkisch, Edouard, 2012. "The Renminbi and Poor-country Growth," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 35(3), pages 273-294.
    19. Stephane Straub, 2011. "Infrastructure and Development: A Critical Appraisal of the Macro-level Literature," Journal of Development Studies, Taylor & Francis Journals, vol. 47(5), pages 683-708.
    20. Oscar Afonso & Sara Monteiro & Maria Thompson, 2014. "Innovation Economy, Productive Public Expenditure and Economic Growth," Metroeconomica, Wiley Blackwell, vol. 65(4), pages 671-689, November.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:emeeco:v:3:y:2011:i:1:p:59-110. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: http://www.emergingmarketsforum.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.