Public Infrastructure and Growth: New Channels and Policy Implications

59 Pages Posted: 20 Apr 2016

See all articles by Pierre-Richard Agenor

Pierre-Richard Agenor

University of Manchester - School of Social Sciences

Blanca Moreno-Dodson

World Bank

Date Written: November 1, 2006


This paper provides an overview of the various channels through which public infrastructure may affect growth. In addition to the conventional productivity, complementarity, and crowding-out effects typically emphasized in the literature, the impact of infrastructure on investment adjustment costs, the durability of private capital, and the production of health and education services are also highlighted. Effects on health and education are well documented in a number of microeconomic studies, but macroeconomists have only recently begun to study their implications for growth. Links between health, infrastructure, and growth are illustrated in an endogenous growth model with transitional dynamics, and the optimal allocation of public expenditure is discussed. The concluding section draws implications of the analysis for the design of strategies aimed at promoting growth and reducing poverty.

Keywords: Transport Economics Policy & Planning, Health Monitoring & Evaluation, Economic Theory & Research, Public Sector Economics & Finance, Private Participation in Infrastructure

Suggested Citation

Agenor, Pierre-Richard and Moreno-Dodson, Blanca, Public Infrastructure and Growth: New Channels and Policy Implications (November 1, 2006). World Bank Policy Research Working Paper No. 4064. Available at SSRN:

Pierre-Richard Agenor (Contact Author)

University of Manchester - School of Social Sciences ( email )

Oxford Road
Manchester, M13 9PL
United Kingdom

Blanca Moreno-Dodson

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

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