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The role of infrastructure efficiency in economic development – the case of underused highways in Europe

Author

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  • José Pedro Pontes
  • Joana Pais

Abstract

In this paper, we establish a two way causality between the phenomenon of the infrastructure which is underused (the so called “white elephant case”) and the aggregate productivity level (TFP) of the economy. On the one hand, the fact that a transport infrastructure is not used so much as it could be is itself a cause of low TFP, because it represents a low productivity for an important item of social capital. On the other hand, low aggregate productivity makes firms strategies founded on large scale of production and exports more risky, given the possibility that the political decision to build the required transport infrastructure may never be taken.

Suggested Citation

  • José Pedro Pontes & Joana Pais, 2018. "The role of infrastructure efficiency in economic development – the case of underused highways in Europe," Working Papers REM 2018/32, ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa.
    • Handle: RePEc:ise:remwps:wp0322018
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    File URL: https://rem.rc.iseg.ulisboa.pt/wps/pdf/REM_WP_032_2018.pdf
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    Cited by:

    1. Jose Pedro Pontes & Telmo Peixe, 2021. "On The Roots Of Underdevelopment:“Wrong Equilibrium” Or “Miscoordination”?," Working Papers REM 2021/0187, ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa.

    More about this item

    Keywords

    Total Factor Productivity; Efficiency in Infrastructure Use; Economic Development; Transport Economics;
    All these keywords.

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • R40 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - General

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