Publication: Measuring Economy Wide Effects of Big Transport Projects: The Case of Georgia
Date
2016-05
ISSN
Published
2016-05
Author(s)
Monsalve, Carolina
Abstract
Georgia is upgrading its principal
highway, running for more than 350 kilometers between the
Black Sea on its western border and Azerbaijan in the east,
at a cost of about 2.3 billion US dollars, or nearly 14
percent of its 2014 Gross domestic product (GDP). Apart from
the immediate effects of the construction (financed largely
by international institutions), how much will this
relatively large investment improve economic conditions in
Georgia? Will it significantly reduce travel costs, and if
so, how much of the gain will flow through to the whole
economy? Answers to those types of questions are rarely
quantified for infrastructure projects in developing
countries, either because the projects are too small or the
necessary country-specific model is lacking. The Georgia
project offered a unique combination of circumstances that
made the estimations feasible: (1) a large investment
relative to the size of the economy; (2) an already existing
model and dataset depicting how the sectors of Georgia’s
economy interact; and (3) partial completion of the road
upgrade that allowed a simulation of expected gains to be
informed by actual interim outcomes.
Citation
“Monsalve, Carolina. 2016. Measuring Economy Wide Effects of Big Transport Projects : The Case of Georgia. Connections;. © World Bank, Washington, DC. http://openknowledge.worldbank.org/handle/10986/24959 License: CC BY 3.0 IGO.”