OECD Economics Department Working Papers
Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.
The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.
- Forthcoming titles
- ISSN: 18151973 (online)
- https://doi.org/10.1787/18151973
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.
Keywords: regulation, network industry, growth, investment
JEL:
L90: Industrial Organization / Industry Studies: Transportation and Utilities / Industry Studies: Transportation and Utilities: General;
Q48: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Energy / Energy: Government Policy;
H40: Public Economics / Publicly Provided Goods / Publicly Provided Goods: General;
O40: Economic Development, Innovation, Technological Change, and Growth / Economic Growth and Aggregate Productivity / Economic Growth and Aggregate Productivity: General
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