The Impact of Public Infrastructure on the Productivity of the Chilean Economy

13 Pages Posted: 1 Jun 2004

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Abstract

The aim of this study is to assess the effect of the change in infrastructure capital on the cost structure of the Chilean economy, and, thereby, on productivity, differentiating between two key institutional periods. A further aim is to establish the extent to which infrastructure capital formation affects private capital. The authors use an econometric estimation of the cost elasticity of infrastructure. Conclusions indicate that an increased infrastructure capital reduces the production cost of the economy, thereby, increasing productivity, mostly in the second period. In turn, especially in this latter period, infrastructure capital formation appears to assert both a positive cost-share effect on private capital and a negative cost-share effect on labor. These effects can be explained to a large extent by the significant differences between the institutional structures of the two consecutive periods studied.

Suggested Citation

Albala-Bertrand, José Miguel and Mamatzakis, Emmanuel C. Manolis, The Impact of Public Infrastructure on the Productivity of the Chilean Economy. Review of Development Economics, Vol. 8, No. 2, pp. 266-278, May 2004. Available at SSRN: https://ssrn.com/abstract=531758

José Miguel Albala-Bertrand (Contact Author)

Queen Mary, University of London ( email )

Mile End Road
Queens' W309
London E1 4NS
United Kingdom
+44 20 7882 5094 Ext. 5094 (Phone)
+44 20 8983 3580 (Fax)

Emmanuel C. Manolis Mamatzakis

University of Macedonia ( email )

Thessaloniki, 54006
Greece

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