Table of Contents
by
Carol Corrado, Jonathan Haskel, Cecilia Jona-Lasinio, Massimiliano Iommi
J. Infras. Policy. Dev.
2018
,
2(1);
2540 Views
Abstract
This paper uses a new cross-country cross-industry dataset on investment in tangible and intangible assets for 18 European countries and the US. We set out a framework for measuring intangible investment and capital stocks and their effect on output, inputs and total factor productivity. The analysis provides evidence on the diffusion of intangible investment across Europe and the US over the years 2000-2013 and offers growth accounting evidence before and after the Great Recession in 2008-2009. Our major findings are the following. First, tangible investment fell massively during the Great Recession and has hardly recovered, whereas intangible investment has been relatively resilient and recovered fast in the US but lagged behind in the EU. Second, the sources of growth analysis including only national account intangibles (software, R&D, mineral exploration and artistic originals), suggest that capital deepening is the main driver of growth, with tangibles and intangibles accounting for 80% and 20% in the EU while both account for 50% in the US, over 2000-2013. Extending the asset boundary to the intangible assets not included in the national accounts (Corrado, Hulten and Sichel (2005)) makes capital deepening increase. The contribution of tangibles is reduced both in the EU and the US (60% and 40% respectively) while intangibles account for a larger share (40% in EU and 60% in the US). Then, our analysis shows that since the Great Recession, the slowdown in labour productivity growth has been driven by a decline in TFP growth with relatively a minor role for tangible and intangible capital. Finally, we document a significant correlation between stricter employment protection rules and less government investment in R&D, and a lower ratio of intangible to tangible investment.
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by
Ekaterine Vashakmadze, Gerard Kambou, Derek Chen, Boaz Nandwa, Yoki Okawa, Dana Vorisek
J. Infras. Policy. Dev.
2018
,
2(1);
1672 Views
Abstract
Investment growth in many emerging market and developing economies (EMDEs) has slowed sharply since 2010. Investment growth performance has varied significantly across different regions, however. This paper examines the evolution of investment growth in six EMDE regions, documents remaining investment needs, especially for infrastructure, and presents a set of region-specific policy responses to address these needs. It reports three main findings. First, investment growth has been particularly weak in EMDE regions hosting a large number of commodity exporters. In regions with a substantial number of commodity-importing economies, investment growth has been somewhat resilient but has also declined steadily since 2010. Second, sizable investment needs remain in most EMDE regions to make room for expanding economic activity and rapid urbanization. A large portion of these investment needs is in infrastructure and human capital. Finally, while specific policy priorities vary across regions, several policy options to address remaining investment needs apply universally. These include more, and more efficient, public investment and measures to improve overall growth prospects and the business climate. Improved project selection and monitoring, as well as better governance, may enhance the efficiency and benefits from public investment.
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by
Alfredo M. Pereira, Rui M. Pereira
J. Infras. Policy. Dev.
2018
,
2(1);
1711 Views
Abstract
Using a newly developed data set, we analyze the effects of infrastructure investment on economic performance in Portugal. A vector-autoregressive approach estimates the elasticity and marginal products of twelve types of infrastructure investment on private investment, employment, and output. We find that the largest long-term accumulated effects come from investments in railroads, ports, airports, health, education, and telecommunications. For these infrastructures, the output multipliers suggest that these investments pay for themselves through additional tax revenues. For investments in ports, airports and education infrastructures, the bulk of the effects are short-term demand-side effects, while for railroads, health, and telecommunications, the impact is mostly of a long-term and supply-side nature. Finally, investments in health and airports exhibit decreasing marginal returns, with railroads, ports, and telecommunications being relatively stable. In terms of the other infrastructure assets, the economic effects of investments in municipal roads, electricity and gas, and refineries are insignificant, while investments in national roads, highways, and waste and waste water have positive economic effects but too small to improve the public budget. Clearly, from a policy perspective, not all infrastructure investments in Portugal are created equal.
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by
Aladdin D. Rillo, Zulfiqar Ali
J. Infras. Policy. Dev.
2018
,
2(1);
1840 Views
Abstract
Infrastructure development is critical for sustaining Asia’s economic growth. Unfortunately, huge financing gaps—estimated by a recent Asian Development Bank study to be USD22.5 trillion—constrain the ability of most emerging Asian countries to fully realize the benefits of infrastructure development. For instance, over 70% of infrastructure investments in Asia are still funded by public resources, which pose acute financing challenges for many countries with limited budgets and fiscal constraints. This paper discusses some of the challenges associated with public financing of infrastructure projects in emerging Asian countries, before introducing some new options for alleviating their infrastructure investment needs. In particular, it proposes a new approach to infrastructure financing by utilizing the spillover effects of infrastructure investment, where additional revenues generated from such investment can be channeled back to investors as subsidy to increase the returns to their investment. The paper also argues the need for Asian countries to implement fiscal reforms and to develop a more balanced approach to financing, one that involves both the private and public sector.
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by
Hongjoo Hahm, Selim Raihan
J. Infras. Policy. Dev.
2018
,
2(1);
8694 Views
Abstract
Using a Global Trade Analysis Project (GTAP) model, and China as the base for analytical comparison, this paper shows that there are significant economic benefits to China and the participating countries along all six Belt and Road Initiative (BRI) economic corridors. However, to maximize these benefits, the social and environmental risks need to be well managed. The analysis shows a clear sequencing in terms of priority corridors. Two corridors have minimal investments and immediate returns, two corridors have significant investments with huge returns, and two corridors have high investments with lower returns. Overall, the paper demonstrates that to ensure the sustainability of any BRI corridor development, there is a need to consider its costs and benefits from the economic, social and environmental perspectives.
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by
Kunagorn Kunavut, Atsuko Okuda, Dongjung Lee
J. Infras. Policy. Dev.
2018
,
2(1);
3106 Views
Abstract
The Belt and Road Initiative (BRI) aims to enhance connectivity and collaboration among 60 countries and beyond in Asia, Africa and Europe. Information and communications technology (ICT) is an indispensable component of the initiative, critical in providing fundamental communication channels for global financial transactions, trade exchanges and transport and energy connectivity, and socio cultural collaboration and scientific exchanges between people, organizations and countries along the BRI corridors. Previously constrained by infrastructure deficits in ICT, the Asia-Pacific region is accelerating its efforts to provide reliable and affordable broadband networks throughout the region, to contribute to successful implementation of the Sustainable Development Goals (SDG). Within the BRI corridors, this study which has been undertaken as part of the research programme of the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) on promoting regional economic cooperation and integration, focuses on the China-Central Asia Corridor (China, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan), giving attention to the sub-region’s specific challenges, namely limited international transit opportunities and an increase in bandwidth requirements that is expected to grow exponentially, as the fourth industrial evolution centered on automation and artificial intelligence gathers momentum. The sub-region is characterized as highly dependent on the ease and costs of connecting to neighboring countries for transit, as many countries in the sub-region are landlocked developing countries (LLDC). Because of the geographical features and other factors, the development potential of Central Asia and its integration into globalization, continues to be stymied by insufficient international bandwidth and high transit costs to access international links. Therefore, improved ICT connectivity in Central Asia through the BRI corridor could result in improved availability and affordability of broadband networks and services in the sub-region. For the purpose of this study, a gap analysis is the methodology that underpins the proposed topology for the China-Central Asia Corridor. The analysis included examining the current state of the optic infrastructure, such as existing and planned fiber-optic networks, existing Internet Exchange Points (IXPs) and international gateways. The study also identifies the key factors that determine the desired future state of infrastructure deployment for the BRI initiative. A topology that consists of connecting Almaty (Kazakhstan) and Urumqi (China), as core nodes, is proposed based on a partial mesh topology. Over and above this core finding, the study concludes that digital infrastructure connectivity has a tendency of lagging behind the rapid opportunities evolving, and the study therefore advocates for sub-regional and regional approaches, including the BRI and Asia-Pacific Information Superhighway (AP-IS) in further expanding regional broadband networks. A key recommendation of the study is co-deployment of broadband infrastructure along passive infrastructure, as an additional cost effective means of achieving fast and affordable broadband connectivity for all.
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by
Alessandra Camparano, Joanna Masic
J. Infras. Policy. Dev.
2018
,
2(1);
1828 Views
Abstract
Chinese municipalities have developed a large stock of capital assets during a period of rapid growth and urbanization, but have yet to modernize asset management practices. Cities face challenges such as premature decline of fixed assets and spiking liabilities related to operating and maintaining assets. This paper evaluates the asset management practices in three selected small cities and towns in China, using a benchmarking assessment tool followed by an in-depth field assessment. The paper finds that overall performance is below half the international benchmark for good practice in all three cities. Management practices are considerably more advanced for land than for buildings and infrastructure. Key deficiencies in data availability and reporting, governance, capacity, and financial management indicate increased risks for local government finance and the delivery of public services. For small cities and towns where public revenues are often uncertain and limited, urban public services will be at risk of deterioration unless good asset management practices are put in place. The paper recommends strategic actions for upper and lower levels of government, to advance local asset management practices and facilitate the reform agenda.
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by
Wai-Hang Yee, Hui Li
J. Infras. Policy. Dev.
2018
,
2(1);
1738 Views
Abstract
The study looks into how governance qualities of decentralized governments mediate the impacts of decentralization on development. Based on a set-oriented approach, the study analyzed data from a nation-wide survey conducted with business managers from all provinces in Indonesia, and found evidence that, despite the country’s uniform decentralization reform, individual provinces exhibited great variation in the qualities of their various physical and institutional infrastructures. Notably, these qualities assumed nested relations, with order and security as well as accountability and rule of law seemingly being the preconditions of basic infrastructure provision as well as local governments’ coordination . Moreover, business investment decisions (measured as staff expansion and product innovation) were found to vary with some specific combinations of these infrastructural conditions. The result provides evidence supporting the argument that both physical and institutional infrastructures are instrumental to realize the supposed benefits of decentralization and supports the recent call of the literature to look into the political-institutional complex in the process of decentralization reform.
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by
Editorial Office
J. Infras. Policy. Dev.
2018
,
2(1);
1346 Views
Abstract
Asian Infrastructure Investment Bank’s president Mr. Jin Liqun shares with JIPD Editor-in-Chief, Dr. Gu Qingyang, his passion for infrastructure finance, as he reflects upon his goal of steering an environmentally friend and corruption-free AIIB toward building social-impacting infrastructure across Asia. From governmental departments to international financial institutes, Mr. Jin Liqun has undertaken almost every essential role in finance. With his vast experience across the private and public sectors, particularly in multilateral development banks, Mr. Jin Liqun currently serves as Asian Infrastructure Investment Bank (AIIB)’s first President since its founding in 2016, following a stint as Secretary-General of the Multilateral Interim Secretariat created to establish the bank. Beginning from his two decades of governmental experience at the Chinese Ministry of Finance, rising from the rank of Deputy Director General to Vice Minister, Mr. Jin was then called to serve as Vice President, and then Ranking Vice President, of the Asian Development Bank, and later as Alternate Executive Director for China at the World Bank and at the Global Environment Facility. Mr. Jin had also served as Chairman of China International Capital Corporation Ltd., China’s first joint-venture investment bank, in addition to serving as Chairman of the Supervisory Board of the sovereign wealth fund China Investment Corporation and as Chairman of the International Forum of Sovereign Wealth Funds.
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