Publication: The Impact of Infrastructure on Development Outcomes: A Qualitative Review of Four Decades of Literature
Date
2023-03
ISSN
Published
2023-03
Author(s)
Abstract
Policy makers have long used
investing in public infrastructure as a means of reducing
geographical disparities and promoting growth. The goal of
this paper is to provide insights to development
practitioners on designing interventions to maximize the
development impact of infrastructure. For this, the paper
presents a systematic qualitative overview of the
literature, covering more than 300 studies conducted between
1983 and 2022, focusing on specific infrastructure sectors,
namely digital, energy, and transport. The study also
considers various dimensions of development impact,
including output and productivity, poverty and inequality,
labor market outcomes, human capital formation, and trade,
to develop a nuanced understanding of the mechanisms through
which infrastructure contributes to these development
outcomes, focusing on low- and middle-income countries. As
such, it is the most substantive effort of its kind to date.
Overall, despite some mixed results, the overwhelming
balance of evidence suggests that infrastructure
improvements are critical in supporting the development
process. Studies on digital infrastructure show that firm
productivity, employment, and welfare increase with the
arrival of broadband internet coverage. In addition, the
availability of mobile phones improves coordination between
producers and traders and hence reduces the price dispersion
of agricultural products. Turning to rural electrification,
significant literature documents the positive impact of
infrastructure on household welfare, structural
transformation, and human capital formation through
increased labor force participation, more time spent on
education, and increased indoor air quality. Investments in
the reliability of power supply also contribute to firms’
productivity. However, studies based on randomized
controlled trials have not tended to find a substantial
short-term impact in the context of dispersed rural
populations. Finally, there is rich literature on various
transport infrastructure-to-development linkages,
particularly for rural roads and for Sub-Saharan Africa.
While households’ income and consumption benefit from the
existence of rural roads, highways are also found to
contribute to firms’ competitiveness. Similarly, public
transportation, railways, and ports have positive impacts on
the development process.
Citation
“Foster, Vivien; Gorgulu, Nisan; Straub, Stéphane; Vagliasindi, Maria. 2023. The Impact of Infrastructure on Development Outcomes: A Qualitative Review of Four Decades of Literature. Policy Research Working Papers; 10343. © World Bank, Washington, DC. http://hdl.handle.net/10986/39515 License: CC BY-NC 3.0 IGO.”