دانلود رایگان ترجمه مقاله تاثیر زیرساخت حمل و نقل بر رشد اقتصادی (نشریه تیلور و فرانسیس 2016)

تاثیر زیرساخت حمل و نقل بر رشد اقتصادی: شواهدی تجربی از پاکستان

The impact of transportation infrastructure on economic growth: empirical evidence from Pakistan

Abstract

The direct and indirect effects of transportation infrastructure have a positive impact on the economic growth and development of a country. Apart from improving accessibility, infrastructure development brings along trade and investment opportunities to the previously unconnected regions. It also provides access to goods, services, and employment opportunities in these regions through the multiplier effect. In this paper, a panel of data is employed using the unit root, cointegration, and Granger Causality (GC) model to test whether causal linkages between economic growth and transportation infrastructure exist at national and provincial level. The findings suggest that in the short run, there is no causality between the two variables at the national level, however, a unidirectional causality from economic development to infrastructure investment exists in the long run. At the provincial level, bidirectional causality in the rich and much developed provinces exists, whereas a unidirectional GC exists from economic growth to transportation infrastructure in the underdeveloped provinces. The outcomes of the model shed light on the fact that infrastructure investment per se is not sufficient to boost the economic activity in the underdeveloped regions of Pakistan. A cointegrated investment package is needed, targeting not only infrastructure but also the social and technological development, which can help these regions to realize the promotion of economic growth in the long run.

1 Introduction

The role of infrastructure in economic growth and social welfare has been studied extensively across the literature over the past years (Sahoo and Dash, 2009; Lakshmanan, 2011; Yu et al., 2012 among others). The contributions of an efficient and effective transportation system to economic growth and stability are numerous, for example, the costs of transportation and production are reduced through timely delivery and enhancing the economies of scale in the production process, integrating markets, creating economic opportunities, and communication links, enhancing the competitive advantage of the production and economy, thereby promoting trade. A competent transportation system also generates a large number of employment opportunities, encourages tourism and foreign investment. These positive outcomes of effective transportation system are more pertinent to developing countries.

Globally transportation and communication are changing every aspect of human life, from trade to manufacturing, education, research, entertainment, culture, and defense. Most emerging economies being aware of the strength of these services are transforming their resources towards knowledge and communications. Recently, however, developing countries are struggling to maintain investment in infrastructure because of the commodity prices and the global financial crisis. Consequently, many new mega projects mainly in the energy and water sectors are closed (Commission, 2011). Many Governments are now turning to alternative modes of financing, such as public private partnership and build-operate-transfer (BOT) models. However, even these modes of financing have proven challenging for most developing countries as they have yet to come up with a legal and regulatory framework for such transactions. Until such a framework exists, infrastructure financing will continue through foreign aid, collecting taxes, and imposing development and user charges.

The discussion on the nexus between infrastructure and economic growth was fueled in the last two decades. Perhaps the first empirical insight into the subject came from Aschauer (1989a, 1989b, 1989c), suggesting investment in infrastructure has a significant positive effect on production and economy. Holtz-Eakin and Schwartz (1995), however, contested the empirical evidences showing the positive relationship between infrastructure and economic growth, and document no evidence of quantitatively important spillovers of state highways on the growth of US economy. Later, by employing Mexican data Lachler and Aschauer (1998) instigated an entirely new debate among researcher by suggesting that investments alone are not sufficient for economic growth. Since then, a plethora of empirical studies examined the linkage between infrastructure and economic growth by introducing new variables having plausible impact on economic growth. The existing scholarship embarking on this subject is divided into two strands, one concerned with the output elasticity of infrastructure capital, whereas the other on optimal and effective use of infrastructure for economic growth. As far as the first branch is concerned, many researchers have reported a positive output elasticity of infrastructure investment (Munnell, 1992; Bank, 1994; Holtz-Eakin and Schwartz, 1995; Calderón and Servén, 2004; Canning and Bennathan, 2007, Crafts, 2009; Sahoo and Dash, 2009). Similarly, Fujita and Thisse (2002), Crafts (2009), Chen (2010) and Lakshmanan (2011) shed light on the optimal level of infrastructure for economic growth. Among these, of particular importance is Canning and Pedroni (2008) research as they emphasized that there is an optimal level of infrastructure maximizing the growth rate and anything above would divert investment from more productive resources, thereby reducing overall growth.

Despite the fact, existing studies provide a useful insight on the impact of infrastructure and economic growth across a range of countries; however, there are no studies examining this relationship in Pakistan which has the unique economic characteristics. Pakistani economy is characterized with the political instability, lack of rule of law, institutional instability, and higher extent of corruption of government officials – all these features somehow negatively influence the relationship between infrastructure and economic growth. In an attempt to fill this literary gap, this paper investigates the GC relationship between Pakistan’s national and provincial transportation infrastructure development and economic growth by employing a panel data over the period of 1982–2010. The provincial level analysis will provide a valuable insight into the causality (or lack of causality) between infrastructure and economic growth and will serve to compare the findings at the national level and provincial level. Moreover, such a study will also illustrate the disparity between different provinces of Pakistan in terms of economic growth and infrastructure investment. As far as we know, this is among the first study conducted on the causality between Pakistan’s transportation infrastructure and economic growth.

The rest of the paper proceeds as follows. Next section provides a brief literature review of related studies. A discussion on the current situation of infrastructure and economic condition of Pakistan will be followed. Subsequently, the data and methodology will be presented. It is followed by the empirical analysis, whereas the last section concludes the paper.