Location of Repository

Infrastructure's contribution to aggregate output

By David Canning


Using panel data for a cross-section of countries, the author estimates an aggregate production function that includes infrastructure capital. He finds that: 1) The productivity of physical and human capital is close to the levels suggested by microeconomic evidence on their private returns. 2) Electricity generating capacity and transportation networks have roughly the same marginal productivity as capital as a whole. 3) Telephone networks appear to show higher marginal productivity than other types of capital. Panel data co-integration methods used in estimation take account of the non-stationary nature of the data, are robust to reverse causation, and allow for different levels of productivity and different short-run business-cycle and multiplier relationships across countries.Economic Theory&Research,Banks&Banking Reform,Decentralization,Capital Markets and Capital Flows,Fiscal&Monetary Policy,Economic Theory&Research,Banks&Banking Reform,Economic Growth,Environmental Economics&Policies,Inequality

OAI identifier:

Suggested articles



  1. (1999). 14Policy Research Working Paper Series Contact Title Author Date for paper WPS2227 The Sri Lankan Unemployment Martin Rama
  2. (1992). A Contribution to the Empirics of Economic Growth."
  3. (1998). A Database of World Stocks of Infrastructure, 1950-1995."
  4. (1995). Another Look at the Instrumental Variable Estimation of Error-Components Models."
  5. (1999). GMM Estimation of Empirical Growth Models." Hertford College,
  6. (1995). Growth Empirics: A Panel Data Approach."
  7. (1999). Infrastructure and Long-Run Economic Growth."
  8. (1997). Infrastructure Capital and Economic Growth: How Well You Use It May Be More Important Than How Much You Have."
  9. (1994). Infrastructure Investment: A Review Essay."
  10. (1993). International Comparisons of Educational Attainment."
  11. (1989). Is Public Expenditure Productive."
  12. (1996). Mind Your P's and Q's, The Cost of Public Investment is Not the Value of Public Capital."
  13. (1998). Needed, A Theory of Total Factor Productivity."
  14. (1997). On the Estimation and Inference of a Cointegrated Regression in Panel Data."
  15. (1997). Panel Cointegration; Asymptotic and Finite Sample Properties of Pooled Time Series Tests, with an Application to the PPP Hypothesis: New Results."
  16. (1994). Public Sector Capital and the Productivity
  17. (1996). Reopening the Convergence Debate: A New Look at Cross-Country Growth Empirics."
  18. (1994). Returns to Investment in Education: A Global Update."
  19. (1997). Spurious Regression and Residual-Based Tests for Cointegration in Panel Data."
  20. (1995). Temporal Aggregation and the Power of Tests for a Unit Root."
  21. (1995). Testing for Unit Roots in Heterogeneous Panels."
  22. (1996). The Effect of Public Capital in StateLevel Production Functions Reconsidered." Review of Economics and Statistics:
  23. (1997). The Neoclassical Revival in Growth Economics: Has it Gone Too Far?"
  24. (1996). The Poverty of Nations: A Quantitative Exploration."
  25. (1985). The Returns to Education: A Further International Update and Implications."
  26. (1998). Why Do Some Countries Produce So Much More Output Per Worker Than Others?"
  27. (1994). World Development Report 1994: Infrastructure for Development.

To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.