Public Infrastructure and Development

Lack of a good infrastructure and communications causes high transaction costs and physical isolation reflected in a large extent of self-subsistence. It is well-known that rural poverty tends to be concentrated in remote areas. Yet, on the other hand, remoteness may prove helpful in safeguarding natural resources since the opening of new roads has the effect of inducing over-exploitation of natural resources the products of which are in high demand in urban locations. It is not only the quantity and the quality of communication ways that matters for various dimensions of long-term development. Their design and layout may also have significant impact, such as when there is a unique path crossing economically strategic areas: in this case, indeed, politically motivated movements may easily block transport of key goods with disastrous consequences for the national economy. These various aspects of the problem of transport infrastructure in developing countries have been considered, with special reference to SubSaharan Africa and Latin America.

First-hand data have been collected by CRED's members in Bolivia (ongoing) and Peru (ongoing).