The Regional Development Impacts of Transport Infrastructure: A Literature Review and Policy Implications

September 9, 2014 |

Authors: Edgar Morgenroth
Investing In Our Transport Future: A Strategic Framework for Investment in Land Transport: Background Paper Seven

Infrastructure and particularly transport infrastructure investment is often seen as an important policy tool for regional development. This paper considers some of the evidence on the effect of transport infrastructure on regional development. Transport infrastructure investment over the period from 1995 was not overly concentrated in the Dublin area. It is also shown that peripherality is difficult to eliminate, suggesting that peripheral parts of the country will need additional advantages over more central locations other than transport infrastructure. The paper reviewed various strands of the literature on the effect of transport infrastructure on economic development. The theoretical literature highlights a number of channels by which transport investment can impact on growth and some conditions which might reduce this impact. The empirical literature also shows some mixed results. While on average, studies find a positive return of transport infrastructure investment, the return is smaller than sometimes assumed and at the regional level spillovers are important. Indeed, some results suggest that investment in neighbouring regions can have a bigger positive effect on peripheral regions than investment in the region itself.

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