The Role of Infrastructure in Development

By Gerardo Celis Toussaint

This book aims to outline the most significant connections between infrastructure provision and regional development and reach some generalisations.

• Language: English
• Publisher: Renacimiento Inmobiliario
• Release date: Apr 24, 2023
• ISBN: 9791222098982

Book preview

The Role of Infrastructure in Development

A dissertation submitted to the University of Manchester

THE ROLE OF INFRASTRUCTURE IN DEVELOPMENT

GERARDO CELIS TOUSSAINT

A dissertation submitted to the

University of Manchester Institute of Science and Technology

for the degree of MSc. in

Management and Implementation of Development Projects

Civil and Structural Engineering Department

Institute for Development Policy and Management

October 1996

Declaration

No portion of the work referred in this dissertation has been submitted in support of an application for another degree or qualification of this or any other university or other institution of learning.

ACKNOWLEDGEMENTS

I want to thank the people of Mexico who through their hard work made this opportunity possible for me.

I also want to thank the people of Manchester for their warm welcome that contributed to making all these months much more than an academic experience.

I thank my friends, here and abroad, for walking with me through the path of not being home.

También agradezco a mi familia, por haber estado tan cerca, estando tan lejos.

Finally, I wish to thank to my teachers for their advice and tolerance, and particularly to Dr. Ian Vickridge for his supervision.

THE CANDIDATE

Gerardo Celis Toussaint attained a first degree in civil engineering with full honours from Universidad Iberoamericana in Mexico City in December 1992.

From then, and until September 1995, worked in construction project management in Mexico City.

Parallel to this activity, he was also in charge of the planning lecture Mexico’s Resources and Needs at UIA from Autumn 1993 to Spring 1995.

The final amalgamation of knowledge and skills in civil engineering, management, planning and development issues was finally achieved through the pursuance of the MSc.MIDP.

ABSTRACT

It is generally accepted that there is a relationship between infrastructure provision and regional development. However, the way this relationship operates, the particular links that constitute it or the strength and general applicability of such links are aspects that remain largely unknown. In this dissertation an attempt is made to outline the most significant connections between infrastructure provision and regional development and reach some generalizations.

In order to establish a base for the discussion, the concepts of development and infrastructure are defined, a classification for the latter is given, and the degree to which a certain causality between the two is acknowledged are discussed in the introductory Chapter 1.

Secondly, the most important features characteristic of all those works considered as infrastructure are identified and explained in Chapter 2. These are the attributes common to all infrastructure categories which differentiate them from any other constructions because they can only be found simultaneously in infrastructure units. An examination of these characteristics is the base the understand why infrastructure is so particular.

Next, the most important consequences of infrastructure provision are analysed in Chapter 3. The first series of consequences analysed are the benefits that can be expected from the provision of any infrastructure unit, regardless of its type. Typically, such benefits are reported for particular projects or for a specific category at the most, whereas in this paper, they are addressed as common benefits that can be obtained from any infrastructure group. Sixteen common benefits are analysed on individual sections.

Other important -but not necessarily beneficial- effects on migration, land value, other regions, and politics derived from infrastructure provision are analysed in the following section.

In Section 3.5, particular attention is given to the relation of infrastructure and development with the sectoral structure of the economy. There is evidence to support the idea that the contribution of agriculture to the economy decreases, and that from industry increases, as a country develops. Therefore, some people consider that through the provision of adequate infrastructure a shift in the base of the economy can be achieved, and the level of development increased.

Environmental impacts caused by infrastructure provision are purposely excluded from this dissertation, not because they are not important, but because they are a very ample topic, widely examined in many other references.

It is frequently stated in this dissertation that infrastructure is a necessary but not sufficient condition to bring about development; thus, some of the many other supplementary factors that must be examined, are explained in Chapter 4. Those considered to be the most important -geographic characteristics, private factors of production, other infrastructure and concentration of people and resources- are analysed in some detail in individual sections.

In the three sections of Chapter 5, the influence that the present tendency towards the use of markets, private investment and commercial operation policies has over infrastructure provision is discussed.

Finally, some other important remarks about the relation between infrastructure and development, which are applicable only to specific infrastructure categories are put forward in Chapter 6. These include, for example, the relation between vehicle operating costs and riding surface in transportation infrastructure, the importance of technical studies in power generation infrastructure, and the relation between health and water supply.

Drawn from one of the references, a case study that illustrates many of the arguments discussed is presented in Chapter 7. Conclusions and further research suggestions in Chapter 8 close the exposition.

TABLE OF CONTENTS

1. Introduction: 1

1. OBJECTIVE: 1

2. DEFINITION OF DEVELOPMENT: 2

3. DEFINITION OF INFRASTRUCTURE: 3

4. INFRASTRUCTURE AND DEVELOPMENT: 5

2. CHARACTERISTICS OF INFRASTRUCTURE: 7

3. Consequences OF Infrastructure Provision 15

1. Classification of the Benefits: 15

2. multiplier effect: 17

3. THE COMMON BENEFITS: 18

A. Production Improvement: 18

B. Increased Income: 19

C. Employment: 20

D. Time Savings: 24

E. Increased Markets: 25

F. Equipment Acquisition: 27

G. Transfer of Technology: 28

H. Capacity Building: 29

I. Ensured Supply: 30

J. Safety: 31

K. Income Redistribution: 33

L. Poverty Reduction: 34

M. Environment Protection: 36

N. National Accounting: 38

O. Guidance for Planning: 38

P. Comfort and Convenience: 39

Q. Summary of Benefits: 40

4. OTHER EFFECTS: 42

A. Migration: 42

B. Land value: 43

C. Influence Over Other Regions: 45

D. Governance and Politics: 46

5. SECTORAL STRUCTURE, INFRASTRUCTURE AND DEVELOPMENT: 47

4. SUPPLEMENTARY FACTORS: 51

1. ADDITIONAL FACTORS NEEDED FOR DEVELOPMENT: 51

A. Geographic Characteristics: 51

B. Private Factors of Production: 52

C. Other Infrastructure: 54

D. Concentration: 55

2. obtaining the benefits: 57

3. the beneficiaries: 59

4. MEASURING THE BENEFITS: 59

5. INFRASTRUCTURE AS AN INVESTMENT 65

1. INVESTING IN INFRASTRUCTURE: 65

2. PROVISION AND CONSUMPTION: 66

3. COMMERCIAL SUPPLY: 67

6. SECTOR SPECIFIC FACTORS: 71

1. transport: 71

2. communications: 74

3. power supply: 76

4. water supply, sanitation and health: 76

5. irrigation: 81

6. education: 82

7. housing: 84

7. CASE STUDY: THE EXAMPLE OF FOS: 87

8. CONCLUSIONS: 89

9. REFERENCES: 91

LIST OF TABLES

1.1: Infrastructure Categories: 4

4.1: Average Economic Rates of Return on World Bank-Supported Projects: 63

5.1: Water Supply and Sanitation -Related Infections: 77

5.2: Examples of Water Consumption: 80

LIST OF FIGURES

1.1: Development and Infrastructure Virtuous Cycle: 6

2.1: Infrastructure Provision and Demand: 11

2.2: Infrastructure Main Characteristics: 14

3.1: Classification of Infrastructure Benefits: 16

3.2: Main Connections Between Secondary Benefits and Other Effects: 41

3.3: Isolation of Infrastructure Units: 44

3.4: Sectoral Composition of GDP and Per Capita Income: 47

3.5: Sectoral Consumption of Infrastructure Services: 49

7.1: Infrastructure, Development and External Factors Interaction at Fos Port: 88

1. INTRODUCTION

1.1 OBJECTIVE

It is generally accepted that there is a relationship between infrastructure provision and regional development. The way this relationship operates, the particular links that constitute it or the strength and general applicability of such links are aspects that remain largely unknown.

The World Bank (40) explains that:

" While there is still no consensus on the magnitude or the exact nature of the impact of infrastructure on growth, many studies on the topic have concluded that the role of infrastructure in growth is substantial, significant, and frequently greater than that of investment in other forms of capital."

Most commonly, the links between infrastructure and development have been analysed for particular categories of infrastructure, i.e. water and sanitation, roads, rail, telecommunication, etc. even when all authors agree that the influence of any such category cannot be understood without considering all the components that a development project normally comprises.

The interest on research about infrastructure is supported by the importance it has on the economy of all countries. According to The World Bank (40):

" The services associated with the use of infrastructure (measured in terms of value added) account for roughly 7 to 11 percent of GDP [1] , with transport being the largest sector. Transport alone commonly absorbs 5 to 8 percent of total paid employment. A sample of developing countries shows that infrastructure typically represents about 20 percent of total investment and 40 to 60 percent of public investment. In round figures, public infrastructure investment ranges from 2 to 8 percent (and averages 4 percent) of GDP."

In this dissertation an attempt will be made to outline the most significant relationships between infrastructure provision and development, and reach some generalisations, as well as pointing out areas where more research is necessary.

The purpose