Infrastructure Investment: Links to Growth and the Role of Public Policies

Investment in network infrastructure – the energy, water, transport and telecommunication networks – which performs a vital role for the functioning of the economy, can contribute to raising growth and social welfare. But more is not always better. While the paper shows that investment in the network industries has had a positive effect over and above the addition to the capital stock, there is evidence that investment in the past has sometimes been misallocated. This paper identifies the policy framework that promotes investment that is conducive to growth and ensures the appropriate use of infrastructure. Central aspects of this framework are identified as a robust decision making process, improving the selection of investment projects, the introduction of competitive pressures through the reduction of barriers to entry and vertical separation when this is appropriate. In addition, efficient investment can be promoted by the combination of regulator independence and the application of incentive regulation. L'investissement dans les reseaux d'infrastructure : Liens a la croissance et le role des politiques L’investissement dans les reseaux d’infrastructure, l’energie, l’eau, le transport et les telecommunications jouant un role vital pour le bon fonctionnement de l’economie, peut egalement contribuer a la croissance economique et au bien-etre social. Neanmoins, plus d’investissement n’est pas toujours benefique. Nous montrons que l’investissement d’infrastructure a bien eu des effets positifs allant au-dela de celui de l’accumulation du stock du capital, mais qu’il existe parfois des signes de mauvaise allocation de l’investissement dans le passe. Cette etude identifie le cadre de politique economique qui encourage l’investissement favorable a la croissance economique et conduit a un bon usage des reseaux d’infrastructure. Les elements centraux de ce cadre sont : un processus de prise de decision robuste, une amelioration de la selection des projets d’investissement, l’introduction de pressions competitives par le biais d’une baisse des barrieres a l’entree et de l’integration verticale si necessaire. De plus, l’efficacite de l’investissement peut etre augmentee en combinant independance du regulateur et regulation incitative.

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