Evaluating Investments in Economic Corridor Development: Lessons from the South Asia Subregional Economic Cooperation Study

Abstract

This paper examines experience of economic corridor development in the South Asia Subregional Economic Cooperation (SASEC) region of South Asia. It lays out an applied framework for prioritizing trade-related interventions and investments according to the expected strength of their combined economic impacts. Along the way, and for the first time, the economic geography of northeastern South Asia has been comprehensively mapped. Computer-driven modeling traces the links between resulting spatial transformations to trade affecting productivity, and the spatial distribution of productivity. Spatial transformation and structural changes suggest another channel for welfare gains from trade. In this way the paper makes a novel contribution to the new economic geography literature.

Keywords: economic geography, economic integration, spatial distributions, models of trade, economic corridor development, South Asia

JEL Classification: F15, O18, R11, R12, R15