Public Infrastructure Investment Offers Far-reaching Benefits

Pierre-Richard Agénor is a Professor of International Macroeconomics and Development Economics University of Manchester.

As policymakers in developing countries weigh policies to spur growth and reduce poverty, a big question is whether investing public capital in infrastructure should be a high priority? In a new book, "Public Capital, Growth and Welfare: Analytical Foundations for Public Policy," Pierre-Richard Agénor (Hallsworth Professor of International Macroeconomics and Development Economics, University of Manchester) argues that the answer is yes.

Agénor tells us that the key is factoring in externalities—that is, the benefits offered besides promoting markets and productions. These include better education and health, improved gender equality, and greater innovation. Moreover, a lack of access to infrastructure not only constrains the expansion of markets and private investment but may also hinder reaching health and education targets. Top policy measures should include more vocational training, labor market flexibility, and high-speed communications to promote competitiveness and force innovation.

This post was first published on the Jobs Knowledge Platform.