Access to Infrastructure and Human Development: Cross-Country Evidence

Abstract

Despite extensive policy discussion, limited empirical literature is available concerning the impacts of infrastructure on human development. Furthermore, major infrastructure services, such as transport and energy, are missing in the current Millennium Development Goals (MDGs) framework; although there is a firm consensus that infrastructure is the main vehicle in achieving MDGs. Therefore this study assesses the impacts of several infrastructure variables (access to electricity, access to clean drinking water sources, and road density) on the human development index (HDI) and its three component indexes (i.e., health, education, and income), using the panel data of 1995 to 2010 covering 91 developing countries. Dynamic panel estimation of General Methods of Moments resulted in revealing that all three infrastructure variables have significant positive impacts on HDI. However, access to electricity and access to clean drinking-water sources have positive and significant effects only on education and health indexes. On the other hand, road density is highly significant to increase the income index. Thus it is argued that eradication of all forms of infrastructure poverty (defined as “lack of access to infrastructure services”) is a necessary condition to eliminate human poverty sustainably. Thus it is essentially important to address the infrastructure poverty comprehensively in post-2015 new-development strategies.

Keywords: human development, infrastructure poverty, post-2015 development strategies, panel data

JEL Classification: O10, O15, O19, O20, O21, R40, Y1