infrastructure and Land Policies Ingram Proceedings of the 2012 Land Policy Conference

brandt
Edited by Gregory K. Ingram and Karin L. Brandt

M
ore than half of the global population resides in urban areas, where land policy

infrastructure and Land Policies

and infrastructure facilitate economic opportunities, affect the quality of life,
and influence patterns of urban development. While infrastructure is as old as
cities, technological change and evolving public policies on taxation and regulation
produce new issues worthy of analysis, ranging from megaprojects and greenhouse
gas emissions to involuntary resettlement and sustainability.
Recent research shows that inadequate infrastructure in energy, telecommunications,
transportation, water, and sanitation is associated with income inequality, while it
also degrades health outcomes, reduces access to education, and impedes economic
opportunity. The condition, efficiency, and productivity of infrastructure facilities vary
dramatically both across countries and across sectors within countries, and improving

infrastructure
infrastructure’s performance to good practice levels has a large economic payoff.
A necessary, but so far unmet, challenge is to convince policy makers and voters that
programs that adequately maintain and efficiently use existing infrastructure facilities
pay for themselves very quickly.

and
This volume, based on the 2012 seventh annual Land Policy Conference at the
Lincoln Institute, brings together economists, social scientists, urban planners, and
engineers to discuss how infrastructure issues impact low-, middle-, and high-income

land policies
countries. The authors address issues in China, Africa, and the United States, among
other countries.

Chapter authors:
Alex Anas • Janice A. Beecher • Mirjam de Bruijn • George R. G. Clarke •
Gary C. Cornia • David J. Crapo • Louise Nelson Dyble • Nancey Green Leigh •
Victor A. Matheson • Robert Picciotto • Anu Ramaswami • Felix Rioja •
Katherine Sierra • Yan Song • Lawrence C. Walters

Gregory K. Ingram is president and CEO of the Lincoln Institute of Land Policy
and cochair of the Department of International Studies.

Karin L. Brandt was formerly research analyst and project administrator of

interdepartmental programs at the Lincoln Institute of Land Policy.

Edited by Gregory K. Ingram and Karin L. Brandt

 Infrastructure
and
Land Policies

Edited by

Gregory K. Ingram and Karin L. Brandt

 © 2013 by the Lincoln Institute of Land Policy

All rights reserved.

Library of Congress Cataloging-in-Publication Data

Infrastructure and land policies /
edited by Gregory K. Ingram and Karin L. Brandt.
pages cm.
Includes index.
ISBN 978-1-55844-251-1 (alk. paper)
1. Infrastructure (Economics) 2. Land use.
I. Ingram, Gregory K. II. Brandt, Karin L.
HC79.C314796 2013
333.73—dc23 2013001318

Designed by Vern Associates

Composed in Sabon by Achorn International in Bolton, Massachusetts.

Printed and bound by Puritan Press Inc., in Hollis, New Hampshire.
The paper is Rolland Enviro100, an acid-free, 100 percent PCW recycled sheet.

manufactured in the united states of america

 CONTENTS

List of Illustrations ix
Preface xiii

Infrastructure, Land, and Development 1

1. Global Infrastructure: Ongoing Realities and

Emerging Challenges 3
Gregory K. Ingram and Karin L. Brandt

2. Infrastructure and Urban Development: Evidence from

Chinese Cities 21
Yan Song
commentary 54
David M. Levinson

3. Mobile Telephony and Socioeconomic Dynamics in Africa 61

Mirjam de Bruijn
commentary 83
Anthony M. Townsend

Finance, Regulation, and Taxation 85

4. Economic Regulation of Utility Infrastructure 87

Janice A. Beecher
commentary 123
Timothy J. Brennan

5. The Unit Approach to the Taxation of Railroad and Public

Utility Property 126
Gary C. Cornia, David J. Crapo, and Lawrence C. Walters
commentary 152
J. Fred Giertz
vi Contents

6. The Location Effects of Alternative Road-Pricing Policies 155

Alex Anas
commentary 182
Don Pickrell

The Challenges of Large Projects 187

7. Chicago and Its Skyway: Lessons from an

Urban Megaproject 189
Louise Nelson Dyble
commentary 212
Richard G. Little

8. Assessing the Infrastructure Impact of Mega-Events in

Emerging Economies 215
Victor A. Matheson
commentary 233
David E. Luberoff

9. Involuntary Resettlement in Infrastructure Projects:

A Development Perspective 236
Robert Picciotto
commentary 263
Dolores Koenig

Improving Sustainability and Efficiency 267

10. Sustainable Infrastructure for Urban Growth 269

Katherine Sierra

11. Understanding Urban Infrastructure-Related Greenhouse

Gas Emissions and Key Mitigation Strategies 296
Anu Ramaswami
commentary 313
W. Ross Morrow
Contents vii

12. Strengthening Urban Industry: The Importance of

Infrastructure and Location 318
Nancey Green Leigh
commentary 341
Alain Bertaud

13. What Is the Value of Infrastructure Maintenance? A Survey 347

Felix Rioja
commentary 366
Waheed Uddin

14. How and Why Does the Quality of Infrastructure Service

Delivery Vary? 370
George R. G. Clarke
commentary 407
Ahmed Abdel Aziz

Contributors 409
Index 411
About the Lincoln Institute of Land Policy 440
 ILLUSTRATIONS

Tables
1.1 A Majority of Studies Find That Infrastructure Increases Productivity 8
1.2 Stock Levels Are Highly Correlated, But Performance Varies
Within Countries 18
2.1 Infrastructure Investment Share in Developed Countries, 1950–1990 23
2.2 Variables and Data Sources 34
2.3 Descriptive Statistics of Variables Used in the Land Price Function 36
2.4 Regressive Results in the Land Price Function 37
2.5 Independent Variables in the Conversion Model 47
2.6 Regression Results in the Land Conversion Function 47
4.1 Ownership Structure for Electricity and Water, 2007 97
4.2 Structural and Regulatory Status of the Public Utility Sectors 100
4.3 Allocation of Utility Revenue Requirements Under Economic Regulation 104
4.4 Select Alternatives to Ratebase/Rate-of-Return Regulation 110
5.1 Property Taxes Paid by Selected Electric Utility Operating Companies,
2011 127
5.2 State Assessed Taxable Value as a Percentage of Total Locally Taxable
Value, 1992 129
5.3 Public Utility/Centrally Assessed Property as a Percentage of Total
Taxable Value, 2011 129
6.1 Calibrated Elasticities in RELU-TRAN2 (Chicago MSA) 167
6.2 Percent Changes in Driving-Related Aggregates Under
Road-Pricing Policies 173
6.3 Effects of the Pricing Policies on Jobs, Residences,
and Undeveloped Land 174
6.4 Changes in Welfare Components, Wages, and Rents Under Pricing
Policies 175
8.1 Hosts of the Summer and Winter Olympic Games and FIFA World Cup 216
8.2 Number of Bids for Summer and Winter Olympic Games 218
8.3 Examples of Mega-Event ex ante Economic Impact Studies 220
8.4 Examples of Mega-Event ex post Economic Impact Studies 220
8.5 Costs of Hosting Mega-Events 223
10.1 The Urban Transition by the Numbers 270
10.2 Greening the Local Fiscal Tool Kit 276
10.3 Using Public Finance to Leverage Private Capital for
Sustainable Infrastructure 281
10.4 Mexico’s Urban Transportation Transformation Program 285
Investment Plan
ix
x Illustrations

11.1 Impact of Different Strategies on Near-Term Transport Sector GHG

Mitigation Over Five Years 308
12.1 Loss of Industrial Land to Rezoning in Select U.S. Cities 324
12.2 Local Industrial Issues, Policies, Smart Growth Planning 325
12.3 Comparing the Costs Associated with Greenfield and Brownfield
Development in Portland, OR 333
12.4 Contrasted (Opposed) Paradigms: Large Technical Networked System
Versus Sustainable “Techno-ecocycle” 336
13.1 Additional Operating Costs Due to Using a Road in Bad Condition 348
13.2 The Condition of Infrastructure 349
13.3 Economic Rate of Return for Maintenance Projects 355
13.4 Capital and Operations and Maintenance Expenditures on Public
Infrastructure in the United States, 1956–2004 357
14.1 Correlation of Access Indicators Before Controlling for
Macroeconomic Regressors 375
14.2 Different Measures of Access by Income Level 376
14.3 Impact of Macroeconomic Variables on Availability of Infrastructure 377
14.4 Correlation of Access Indicators After Controlling for
Macroeconomic Regressors 378
14.5 Correlation of Price Indicators Before Controlling for
Macroeconomic Regressors 379
14.6 Impact of Macroeconomic Variables on Price of Infrastructure Services 380
14.7 Correlation of Price Indicators After Controlling for
Macroeconomic Regressors 382
14.8 Correlation of Quality Indicators Before Controlling for
Macroeconomic Regressors 383
14.9 Impact of Macroeconomic Variables on Quality of
Infrastructure Services 384
14.10 Correlation of Quality Indicators After Controlling for
Macroeconomic Regressors 385
14.11 Correlations with Electricity Obstacles 389
14.12 Correlations with Transportation Obstacles 391
14.13 Impact of Macroeconomic and Sector Variables on Perceptions
About Infrastructure 393
14.14 Electricity Variables 401
14.15 Transportation Variables 402
14.16 Water and Telecommunications Variables 403
14.17 Macroeconomic Variables 403
14.18 Pairwise Correlations for Electricity Variables 404
Illustrations xi

Figures
1.1 Growth of U.S. Infrastructure as a Percentage of Maximum Network
Size, 1850–2005 5
1.2 Composition of Infrastructure Stock Values Varies with Country Income 6
1.3 Mobile Cellular Subscriptions and Telephone Lines in Sub-Saharan
Africa, 1991–2011 10
1.4 Private Participation in Infrastructure Versus Development Assistance,
1990–2011 12
1.5 South-South Non-OECD Investment Growth in Sub-Saharan African
Infrastructure, 2001–2009 12
2.1 Urban Infrastructure Investment: Share of Total Investment and Share of
GDP, 1952–2008 23
2.2 Urban Infrastructure Investment: Share of GDP by Region, 1990–2002 24
2.3 Urban Infrastructure Investment: Share of Total Infrastructure
Investment by Region, 1990–2001 25
2.4 Distribution of Infrastructure Investments by Type and Region,
2003–2010 26
2.5 Infrastructure Investment Shift by Region, 1990–2010 27
2.6 Ratios of Investment in Major Urban Transport Sectors to Total Urban
Infrastructure Investments, 2003–2011 28
2.7 Railway and Highway Mileages, 1988–2010 28
2.8 Distribution of Rapid Transit in China 29
2.9 Changes in Funding Sources for Urban Infrastructure Investment,
1980–2010 30
2.10 Infrastructure Investment as a Share of Central Government Spending,
1991–2006 31
2.11 Local Government Income from Land Sales, 1999–2008 32
2.12 Changes in the New Central Business District Area Over Time 40
2.13 Changes in the Huaqiao Area Over Time 42
2.14 Changes in the Yantian Area Over Time 44
2.15 Land Use Changes in Shenzhen, 1994–2005 46
2.16 Zhengzhou Eastern New CBD 50
C2.1 Life Cycle of U.S. Railroads 54
C2.2 The Magic Bullet 55
C2.3 Bird’s-Eye View of Minneapolis, 1865 57
C2.4 Bird’s-Eye View of Minneapolis, 1879 58
C2.5 Bird’s-Eye View of Minneapolis, 1885 59
C2.6 Bird’s-Eye View of Minneapolis, 1891 60
3.1 Estimated Mobile-Cellular Subscriptions Worldwide, 2001–2011 63
3.2 Estimated Mobile-Cellular Subscriptions in Select Regions, 2011 64
xii Illustrations

3.3 Mobile Phone Mast in Nomadic Lands, Mali, 2005 65

3.4 Celtel Advertisement in N’Djamena, Chad, 2007 67
3.5 MTN and the “Right to Communicate,” Bamenda, Cameroon, 2009 68
3.6 Young Men Selling Airtime for Celtel in N’Djamena, 2007 70
3.7 Young Men Selling Airtime for Zain in N’Djamena, 2009 71
3.8 Appolinaire in His Shop, 2012 74
3.9 Mobile Telephony in Reach of Everybody? Women Carrying Water
in Darfur, 2007 80
4.1 Capital Intensity of Major Companies and Public Utilities for 2012 94
4.2 Value Added by Utility Infrastructure to the U.S. GDP, 1977–2011 95
4.3 Compensatory Pricing for Utility Monopolies 103
4.4 Regulatory Tools and Incentives 107
4.5 Regulatory Lag and Incentives 108
5.1 Appraisal Approaches and Techniques Used to Value Utilities and
Transportation Companies 144
6.1 RELU-TRAN Zones for Chicago MSA 158
6.2 Network of Major Roads in RELU-TRAN2 159
6.3 Fuel Intensity Versus Speed 164
7.1 Map of Chicago Skyway and Environs 192
7.2 Main Span of Chicago Skyway 195
7.3 1960 Chicago Skyway Promotional Map 196
7.4 Actual and Projected Traffic on the Chicago Skyway, 1958–1990 198
8.1 Wrigley Field 225
8.2 U.S. Cellular Park 226
8.3 Bird’s Nest, Water Cube, and Olympics Sports Center in Beijing 227
8.4 Soccer City Near Johannesburg 228
10.1 C40 Cities’ Mitigation Measures 275
11.1 Transboundary Infrastructure GHG Emissions Footprint (TBIF)
for Denver 300
11.2 Typical Strategies for GHG Mitigation Initiated by the
Three Actor Categories 304
11.3 Relative Impacts of Key Pathways for Near-Term GHG Mitigation
for Cities 307
C12.1 U.S. Manufacturing Employment Trends, 1939–2011 343
13.1 Relationship Between Growth and the Ratio of Maintenance to
New Investment 353
C13.1 Influence of Life Cycle Phases on Infrastructure: Road Network Example 367
C13.2 Vehicle Operating Cost as a Function of Pavement Condition on
Pavement Serviceability Index Scale of 0 (Failed) to 5 (Excellent) 368
C13.3 VOC Components 369
14.1 Constraints Identified by Firm Managers as Most Difficult 387
 PREFACE

This volume, based on a conference held in Cambridge, Massachusetts, in June

2012, addresses the links between infrastructure and land, particularly in urban
areas. While infrastructure is as old as cities, technological changes and public
policies on taxation and regulation produce new issues worthy of analysis, rang-
ing from megaprojects and greenhouse gas emissions to private participation and
involuntary resettlement. This is the seventh in a series of volumes that address
land policy as it relates to a range of topics including climate change, municipal
revenues and value capture, fiscal decentralization, and property rights.
In addition to the authors and conference participants, many others have
contributed to the design of the conference and the production of this volume.
We thank Armando Carbonell, Martim Smolka, and Joan Youngman for their
advice on the selection of topics and on program design. The conference would
not have been possible without the logistical support of our conference event
team, comprising Brooke Burgess, Sharon Novick, Cindy Moriarty, and Melissa
Abraham. Our special thanks go to Emily McKeigue for her overall management
of the production of this volume, to Vern Associates for the cover design, and to
Nancy Benjamin and Judith Riotto for their tireless and reliable copyediting.

Gregory K. Ingram
Karin L. Brandt

xiii
Infrastructure, Land,
and Development
 1
Global Infrastructure:
Ongoing Realities and
Emerging Challenges

Gregory K. Ingram and Karin L. Brandt

M
ore than 50 percent of the global population resides in urban areas
where the interactions between land policy and infrastructure facilitate
economic opportunities, affect the quality of life, and condition pat-
terns of urban development. Infrastructure drives economic and social activities
and represents the “wheels” of economic activity. Transportation and telecom-
munications facilitate business and trade, while energy and water are necessities
for production processes. Transportation connections within urban areas expand
labor markets, and the provision of basic needs to households—water, sanitation,
and electricity—prevent the spread of disease and increase life spans. Infrastruc-
ture facilities provide the spatial skeleton supporting the location of residences,
commerce, industry, and governmental activities. As cities grow, the demands on
infrastructure facilities and services that support economic activity increase. For
urban areas, the challenges of balancing growth with infrastructure development
and maintenance are reflected in debates about infrastructure’s finance, regula-
tion, and location and about the sustainable levels of its services.
Infrastructure sectors include energy (electricity and natural gas); telecom-
munications (fixed phone lines, mobile phone service, and Internet connectivity);
transportation (airports, railways, roads, waterways, and seaports); and water
supply and sanitation (piped water, irrigation, and sewage collection and treat-
ment). Infrastructure services have technical features such as economies of scale
and economic features including externalities and spillovers from users to non-
users that make many of them difficult to provide as a normal private good.
Because of these attributes, much infrastructure is either publicly provided or

 Gregory K. Ingram and Karin L. Brandt

privately provided with regulatory oversight. Infrastructure also delivers eco-

nomic and poverty-alleviation benefits when it responds to demand and is pro-
vided efficiently.
Infrastructure provision is a major determinant of the location of economic
activities and of the spatial pattern of development of the built environment.
Transport infrastructure in the form of canals, railroads, and highways provides
improved access to adjacent land, which in turn is developed by businesses seek-
ing to reduce the costs of shipping inputs to their plants and outputs to their
customers. Individuals similarly prefer locations well served by transport in order
to widen their labor market opportunities and to ease their shopping and social
interactions. Infrastructure services such as energy, water supply, and sanitation
make the locations they serve more attractive. Community leaders spend much
time devising zoning systems, property taxes, impact fees, and extensions of in-
frastructure services that strongly affect development patterns in urban areas. In
developing countries, the challenge is to provide infrastructure before develop-
ment occurs because it is much less costly to do so beforehand than to retrofit
services in an already developed area.
The historical development of new infrastructure sectors and services has
been driven by technological advances that respond to existing needs. Roads and
canals are the world’s oldest infrastructure sectors. In the nineteenth century,
new infrastructure technologies lowered the costs and increased the demand for
transportation services. In the United States, extensive networks of canals were
constructed in the early nineteenth century, soon to be followed and replaced
by railways in the mid-nineteenth century during the Industrial Revolution. The
paving material of stone and soil macadam improved road quality, allowing for
greater vehicle weights and higher speeds. Around the same time, poor sanita-
tion in cities led to the spread of diseases like cholera. The need in urban areas
for fire prevention and household sanitation led to the extension of the water
supply and sewer lines. The development in the 1880s of alternating current and
long-distance transmission enabled larger generators to take advantage of scale
economies, reducing the cost of electricity. Telecommunication expansion saw the
spread of the telegraph in the second half of the nineteenth century, the diffusion
of the land-line telephone system in the first half of the twentieth century, and
now the adoption of mobile phones and the Internet in the past two decades.
Newly introduced infrastructure technologies expand their networks quickly
because of their lower costs and often higher-quality service, displacing previ-
ous competing services. In the United States, railways and telegraphs quickly
expanded their network coverage at a similar rate, achieving their mature size
in about 45 years (figure 1.1). Railways were a substitute for canals, and the
telegraph was later largely displaced by telephone services. Although the spread
of telephone land lines was briefly slowed by the Great Depression, their expan-
sion continued, and their dominance is now being threatened by mobile phones.
The success of mobile phones is partly based on service convenience, but cost
reductions have also played an important role. For example, the investment cost
global infrastructure: ongoing realities and emerging challenges 

Figure 1.1
Growth of U.S. Infrastructure as a Percentage of Maximum Network Size, 1850–2005

100

90

80

70

60
Percentage

50

40

30

20

10

0
1850
1855
1860
1865
1870
1875
1880
1885
1890
1895
1900
1905
1910
1915
1920
1925
1930
1935
1940
1945
1950
1955
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
Railways Phones Internet
Telegraphs Oil pipelines Roads

Sources: Grübler (2003); Norris (2002).

associated with a mobile phone subscription fell from around $700 in 2000 to
only $100 today (Chatterton and Puerto 2005). Since the mid-1990s, the Internet
network has been growing at a faster Figure
rate1.1than other recent infrastructure tech-
Lincoln_Ingram_Infrastructure
nologies, and its price continues to fall while its service quality increases.
The total value of infrastructure facilities across countries varies proportion-
ally with country incomes. Moreover, the sectoral composition of infrastructure
varies significantly across country income groups (figure 1.2). As a result, coun-
tries with high economic growth rates need to invest higher shares of country
income in infrastructure facilities to maintain the balance between infrastructure
and output. Industrialization and income growth increase the demand for energy
to support development, and the energy sector grows more rapidly with income
than other sectors, such as water and sanitation. Roads make up a fairly constant
share of total infrastructure value across all country income groups.
While infrastructure technology continues to advance, many debates about
infrastructure also persist. A key debate concerns the extent of infrastructure’s
impact on economic growth, urban development, and social development. Private
investment and development assistance for infrastructure have increased in the
past two decades, partly in response to evidence showing high rates of return for
 Gregory K. Ingram and Karin L. Brandt

Figure 1.2
Composition of Infrastructure Stock Values Varies with Country Income

100
90
80
Percentage of stock value

70
60
50
40
30
20
10
0
Low Lower-middle Upper-middle High
Country income group
Energy Roads Telecommunications Water and sanitation

Sources: International Telecommunications Union (2010); World Bank (2012).

infrastructure investment. An ongoing debate in the United States concerns the

adequacy of infrastructure maintenance and how it should be financed. Debates
also continue about other aspects of infrastructure, such as its regulation and tax-
ation. In many countries, the private sector is replacing the public sector in provid-
ing infrastructure services. This requires the1.2public sector to take on an explicit
Figure
regulatory role that often remains implicit when services are publicly provided.
Lincoln_Ingram_Infrastructure
In developing countries, private participation in infrastructure (PPI) investment
has dramatically increased since 1990, and new sources of finance have become
available, especially for well-defined projects such as power-generation facilities or
mobile phone franchises. Large infrastructure projects continue to be a challenge
for infrastructure provision—with political complications and detrimental social
impacts that include involuntary resettlement. Mega-events, such as the Olym-
pic Games, often catalyze large infrastructure investment programs that have had
decidedly mixed postevent consequences. Finally, climate change concerns have
directed attention to improving the sustainability and efficiency of infrastructure.

Infrastructure, Land, and Development

Infrastructure looms large in terms of a country’s share of annual investment, its
share of the total stock of capital in an economy, its contribution to economic
global infrastructure: ongoing realities and emerging challenges 

growth, its effect on human welfare, and its influence on spatial development
patterns. Annual investment in infrastructure ranges across countries from a low
of around 2 percent of gross domestic product (GDP) up to 8 percent—or even
higher in rapidly growing economies. The public sector plays a large role as a di-
rect provider of investment, as a provider of services, and as a regulator of services
provided by itself and others. At the same time, the share of private investment
in infrastructure can be large, ranging up to half or more of annual infrastruc-
ture investment in some countries. The value of cumulative infrastructure invest-
ment—the physical stock of all existing infrastructure—is also large, with its value
averaging around 60 percent of GDP across countries (Ingram, Liu, and Brandt
2013).
Infrastructure services increase economic productivity by offering firms and
households efficient and inexpensive services that enable them to reduce their
transportation, energy, water, sanitation, and communication costs. Lower trans-
portation costs reduce price differences over space and underpin some of the
earliest theories about the distribution of land use and agriculture around urban
centers (von Thünen 1966). Adequate infrastructure is seen as a key determi-
nant of international competitiveness because it can reduce production costs,
ease international transportation, and even facilitate the availability of labor and
specialized services to firms.
Economists use several approaches to measure the productivity impacts of
infrastructure. At the microeconomic level, infrastructure project rates of return
are often substantial and higher than those in other sectors such as agriculture
and human services (World Bank 1994). At the macroeconomic level, production
functions, cost functions, and cross country studies are the main approaches used
to estimate the productivity of infrastructure. Production functions estimate the
contribution of infrastructure to national output, such as GDP, typically in a single
country over time. The results are often summarized in terms of the percentage
increase in national output that is associated with a 1 percent increase in the
amount of infrastructure (the elasticity of output with respect to infrastructure).
The amount of infrastructure is measured either by constructing a perpetual in-
ventory (adding up depreciated annual investment amounts from the past) or by
using current data on physical quantities of infrastructure, such as miles of paved
road or installed generating capacity, multiplied by their unit cost. Data for the
perpetual inventory approach are not as widely available as data on physical
quantities of infrastructure, and private investment is particularly elusive, so the
production function approach tends to focus on public investment. Some ana-
lysts argue that the costs of public infrastructure investment may include extra
expenditures for inefficiencies such as overcapacity or side payments and there-
fore are biased upward (Pritchett 2000). Cost functions explore the extent to
which infrastructure reduces costs at the firm level, and these are also usually
estimated based on data from a single country over time. Cross country studies
relate national amounts of infrastructure (typically using physical quantities) to
national outputs, usually at a single point in time.
 Gregory K. Ingram and Karin L. Brandt

Table 1.1
A Majority of Studies Find That Infrastructure Increases Productivity
Infrastructure Effect (% of studies) Number of Studies
Negative None Positive
Overall results 5.7 31.4 62.9 140
By infrastructure proximity
Public capital 10.8 40.0 49.2 65
Physical indicator 1.3 24.0 74.7 75
By approach
Production function 2.9 36.2 60.9 69
Cost function 7.7 15.4 76.9 13
Cross country regression 13.8 37.9 48.3 29
Source: Straub (2008).

Straub (2008), who reviewed and summarized 140 empirical studies examin-
ing the effect of infrastructure on productivity, reported that nearly two-thirds of
the studies found a positive relation (table 1.1). Studies using physical measures
of infrastructure were more likely to find positive effects than those based on ac-
cumulated past investment. Typical results using production functions and physi-
cal measures report elasticities of output with respect to infrastructure around
0.1 (Calderon, Moral-Benito, and Serven 2011). This indicates that the rate of
return to infrastructure investment is around 16 percent if infrastructure stocks
average 60 percent of GDP, meaning an investment that increased infrastruc-
ture stocks by 1 percent would cost 0.6 percent of GDP and increase output by
0.1 percent of GDP.
Most analyses of returns to infrastructure focus on countries, and few esti-
mate returns to metropolitan areas. However, investment data are available for
two unique metropolitan areas: the special administrative region of Hong Kong
and the city-state of Singapore. Their average economic growth rates from 2000
to 2010 are 4.4 percent and 5.9 percent, respectively. Between 2007 and 2010,
Hong Kong’s infrastructure expenditure averaged 2.56 percent of its GDP, and
Singapore’s averaged 6.44 percent, supporting the view that higher growth rates
are associated with higher infrastructure expenditures (albeit over a short pe-
riod of time in these cases). As Yan Song points out in chapter 2, China—which
has one of the most rapidly growing economies—proposes to invest around
US$1.03 trillion on urban infrastructure during its 12th Five-Year Plan from
2011 to 2015. This is slightly more than 3 percent of its total GDP projected
global infrastructure: ongoing realities and emerging challenges 

over the five-year period—a share larger than many countries routinely invest in
all national infrastructure needs.
In addition to increasing economic productivity, infrastructure promotes hu-
man welfare by reducing the cost of accessing markets: helping farmers get their
crops to market and workers get to jobs. Infrastructure investment also shapes
urban growth patterns, which are linked to transportation networks that serve
local demand and connect cities to expand labor markets and increase incomes.
In developing countries, rural roads also allow easier access to health care and
education, facilitating human capital formation. Adequate infrastructure can re-
duce consumption costs for households. For example, the cost of piped water
in underserved informal settlements is a fraction of the cost of trucked-in water,
and for illumination, electric lights cost much less than candles. Household con-
sumption of infrastructure services improves household productivity, but mea-
suring this productivity increase is difficult because household production is not
included in standard measures of national product. Thus, increases in household
productivity are not normally included in estimates of the productivity impacts
of infrastructure, such as those summarized in table 1.1.
Infrastructure is likely to have collateral benefits that may be of particular
importance to the poor. Improved infrastructure may benefit the poor by increas-
ing the value of their assets. For example, improved rural transportation can in-
crease the value of agricultural land in rural areas, much of which may be owned
by low-income households. Better and safer roads raise school attendance; access
to electricity allows more time to study and makes computer use possible; and
improved water and sanitation reduce child mortality. Empirical work is find-
ing that infrastructure development is associated with reduced income inequal-
ity (Calderon and Serven 2008; Lopez 2004). Infrastructure improvements may
not only increase output, but may also provide a host of benefits to low-income
households.
For example, infrastructure services create developmental and social impacts
at the individual level. Clean water and sanitation service have improved the
health and extended the life expectancies of urban residents, while social relation-
ships have been transformed by telecommunications, particularly mobile phones
in developing countries. Communication in rural areas in the global south is
changing rapidly as mobile phones supplant fixed phone lines. This change is
most notable in sub-Saharan Africa (figure 1.3). The revolution in mobile tele-
phony that is sweeping through Africa has made it much easier for residents in
rural areas and small towns to become knowledgeable about market prices, to
learn of opportunities in other locations, and to keep in touch with distant rela-
tives and friends. The mobile technology itself creates new jobs: running charging
stations where electricity is not readily available, selling mobile credit for min-
utes, and repairing mobile phones. This transformation is changing relationships
as people once spatially isolated become connected through mobile communica-
tion. In chapter 3 Mirjam de Bruijn illustrates this impact with anthropological
case studies in four sub-Saharan African countries.
 10 Gregory K. Ingram and Karin L. Brandt

Figure 1.3
Mobile Cellular Subscriptions Bypass Telephone Lines in Sub-Saharan Africa, 1991–2011

60
Mobile cellular subscriptions
50 Telephone lines
40
Percentage

30

20

10

0
91
92
93
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
10
11
12
19
19
19
19
19
19
19
19
19
20
20
20
20
20
20
20
20
20
20
20
20
20
Source: World Bank (2012).

Finance, Regulation, and Taxation

The economic and social benefits of infrastructure are great, but so are the costs
of developing and maintaining infrastructure. Governments continue to experi-
ment with various financing mechanisms, including fee-for-service pricing ar-
rangements and related revenue-collection schemes. Finance methods vary widely
Figure 1.3
across infrastructure sectors and countries, although user charges, subsidies from
Lincoln_Ingram_Infrastructure
general funds, and borrowing are the primary sources used to pay for operating
costs and investment. User fees are common in many sectors, including telephone
use, power consumption, transit fares, and travel on toll roads. Examples of
indirect cost recovery include fuel taxes, vehicle registration fees, some property
taxes, and land-based revenues. Borrowing from public and private lenders is
advantageous given the long life of many infrastructure facilities. Industrialized
countries have long used sovereign bond finance to fund hydroelectric dams and
road systems, and municipal bonds to finance local infrastructure. These prac-
tices are being adapted to the needs of developing countries. For example, Johan-
nesburg’s “Jozi bonds” support the provision of infrastructure services in poorly
serviced townships that were incorporated into municipalities following the end
of apartheid.
The need for innovative financing schemes to support rapid growth has
drawn attention to the use of land-based finance. Land value capture—the prac-
tice of using land value increases associated with service provision to finance
infrastructure—was the subject of the Lincoln Institute’s previous Land Policy
global infrastructure: ongoing realities and emerging challenges 11

Series volume.1 Value capture is a common practice in Latin America, and vari-
ations of this method are used in other countries. In Bogotá, Colombia, better-
ment levies have supported infrastructure development since the 1930s, including
roads, water and sewer, and more recently sidewalks and public parks (Borrero
et al. 2011). Transit companies in Hong Kong and Tokyo used value capture
to finance transit projects with revenue from the codevelopment of residential
and commercial areas served by transit, and Ahmedabad, India, is known for its
Town Planning Scheme, which uses a land readjustment process to finance infra-
structure for newly urbanized land (Ingram and Hong 2012). Proceeds from the
sale of urban land is a major revenue source used to fund infrastructure in China,
and the sale of development rights is a growing source of revenue in Brazil.
While high- and middle-income countries are more concerned with financing
infrastructure maintenance or infrastructure that supports growth, many low-
income countries face large infrastructure needs. In developing countries, the
projected annual cost of infrastructure investment (US$450 billion) and mainte-
nance needs (US$305 billion) totals US$755 billion, which is nearly 5 percent of
the countries’ aggregate GDP (Ingram, Liu, and Brandt 2013). External funding
commitments for infrastructure have grown substantially and now cover about
46 percent of projected investment in developing countries. This total comprises
bilateral development assistance (US$22 billion in 2010); regular and conces-
sional financing from multilateral development banks (US$23.7 billion in 2010);
and private participation in infrastructure (US$161.7 billion in 2011) (figure 1.4).
Some developing countries are now investing in infrastructure in other developing
countries. This so-called south-south financing has been growing, as enterprises
in one country invest in those in other countries, a practice that has been under
way for some time in Latin America. More recently, some developing countries,
especially China, have been investing in infrastructure projects in sub-Saharan
Africa, often in arrangements where loans are repaid with commodity exports
(figure 1.5).
The movement in developing countries toward greater private sector in-
volvement in infrastructure development is not unprecedented. Private finance
and ownership of infrastructure—including railroads, transit, and canals—were
common in the nineteenth century. Much infrastructure finance shifted to public
sources in the mid-twentieth century and then back to public-private partner-
ships starting in the 1980s. In Europe, power and telephone services were largely
publicly provided, whereas they have been privately provided in the United States
and regulated in terms of service quality, universal service obligations, and price
(usually based on the utility’s rate of return). The United States has more than
100 years of experience with the regulation of utility infrastructure, as Janice A.

1. See the sixth volume in the Land Policy Series, Value Capture and Land Policies, ed. Greg-
ory K. Ingram and Yu-Hung Hong (Cambridge, MA: Lincoln Institute of Land Policy, 2012).
 Figure 1.4
Private Participation in Infrastructure Versus Development Assistance, 1990–2011

200,000

180,000

160,000

140,000
Amount (million US$)

120,000

100,000

80,000

60,000

40,000

20,000

0
90
91
92
93
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
10
11
19
19
19
19
19
19
19
19
19
19
20
20
20
20
20
20
20
20
20
20
20
20
Private participation Bilateral development Multilateral development
in infrastructure assistance banks
Sources: OECD (2012); World Bank (2012); World Bank and Public-Private Infrastructure Advisory Facility (2011).

Figure 1.5
South-South Non-OECD Investment Growth in Sub-Saharan African Infrastructure, 2001–2009

15

12 Figure 1.4
Amount (billion US$)

Lincoln_Ingram_Infrastructure
9

0
2001 2002 2003 2004 2005 2006 2007 2008 2009

Private participation Official development non–Organisation for Economic

in infrastructure assistance Co-operation and Development

Sources: Foster et al. (2008); World Bank (2012); World Bank and Public-Private Infrastructure Advisory Facility (2011).

12
global infrastructure: ongoing realities and emerging challenges 1

Beecher points out in chapter 4. The first U.S. regulatory agency for infrastruc-
ture was the Interstate Commerce Commission (ICC), which was established in
1887 to address railway price discrimination. Other regulatory agencies then
followed to control monopoly power and pricing. Technological advances and
the advent of competing services (e.g., trucking that competes with rail) have led
to deregulation. Thus, the ICC was abolished in 1995, and deregulation has ad-
vanced in telecommunication, trucking, and air travel in the United States.
Privately owned infrastructure service providers in the United States, such as
airlines, gas and electric utilities, railroads, water companies, and telecommunica-
tions firms, are typically subject to property taxation, often at rates that are much
higher than residential rates. This is an often-overlooked topic in property taxa-
tion, and most service users are unaware that their utility bills cover such taxes.
This tax base is of great importance to any local government that hosts utility
plants and equipment. Utility property is generally assessed by state agencies us-
ing methods that differ markedly from those employed by local assessors, with
results that are often controversial and complex, as noted by Gary C. Cornia,
David J. Crapo, and Lawrence C. Walters in chapter 5. Some utilities pay a sub-
stantial portion of their revenues in property taxes, such as Consolidated Edison
Co. of New York, which pays 12 percent of its gross operating revenues in prop-
erty taxes.
Just as physical infrastructure affects urban development patterns, the taxa-
tion of motor vehicle use and the pricing of road infrastructure shape land policy
by affecting location choices and land values. Researchers and planners have de-
bated the impact of tolls, congestion charges, and gasoline taxes on metropolitan
development patterns. The locational setting and spatial coverage of toll systems,
congestion pricing, or fuel and vehicle taxes have implications for residential and
employment location. In theory, congestion charges focused on central locations
could either attract jobs and residents to these areas or displace them. Careful
simulations by Alex Anas in chapter 6 suggest that congestion tolls in central areas
are likely to move jobs and residents to suburban areas, whereas a metropolitan-
wide gasoline tax is likely to cause both jobs and residents to concentrate in the
city.

The Challenges of Large Projects

Extremely large infrastructure projects, such as a new airport, subway system,
or ring road, can produce large changes in land values, location decisions, and
development patterns. The United States has seen many such projects in recent
decades, including the Washington, DC, Metro, the Denver airport, and Boston’s
depression of the Central Artery (“the Big Dig”). These were all multibillion-dollar
projects whose spatial impacts are still under way long after their completion.
For example, the construction of residential, commercial, and office space and
the general concentration of economic activity around Metro stations in Wash-
ington is still ongoing, 25 years after the bulk of the Metro system was opened.
1 Gregory K. Ingram and Karin L. Brandt

In addition, infrastructure megaprojects are frequently well over budget. The

new Denver airport’s final cost was nearly three times its original cost estimate
of $1.7 billion, and the Big Dig’s cost of $14.6 billion was three and a half times
its original cost estimate (all in 2003 dollars). Because megaprojects take a long
time to build and their construction spans several terms of governors, mayors, or
department secretaries, they inevitably become steeped in political lore.
Most megaprojects are long-lived after they begin operation, and their public
and private financing and operation take many forms, as facilities can be trans-
ferred back and forth between public and private operators. A common public-
private instrument is the flexible build-operate-transfer (BOT) scheme. For ex-
ample, Kuala Lumpur, Malaysia, has developed three urban rail lines, each with
varying BOT agreements and government guarantees for domestic debt. While
the financing instrument is important, the outcome of such projects is dependent
on numerous factors, many related to the political environment, which facili-
tate or hinder implementation. In recent years large public facilities have been
sold to private firms, a transfer often motivated by government’s need for funds.
In chapter 7 Louise Nelson Dyble examines the history of political leadership
throughout the Chicago Skyway’s development as a public project and assesses
the lessons from its eventual privatization.
Like megaprojects, mega-events such as the Olympics or the World Cup are
associated with large infrastructure investments and promises of high economic
returns. However, the evidence from host economies shows that these sporting
events typically bring high costs with low rewards, as Victor A. Matheson notes
in chapter 8. For the London 2012 Summer Games, a fifth of the total budgeted
cost for the new Wembley Soccer Stadium was for infrastructure improvements,
including new roads and a renovated transit station to accommodate Olympic
traffic. Mega-event facilities may even serve one event’s single purpose and not
be suitable for other regular events. For the Beijing 2008 Summer Games, the
National Aquatic Center, or “Water Cube,” opened for public swimming after
the Olympics and was later transformed into a large and extraordinarily expen-
sive water park. Some cities have reused sports infrastructure by modifying them
to serve universities or professional teams. Nonetheless, the high costs of these
short-term mega-events raise questions of economic feasibility for host cities in
developing countries.
A perennial issue with megaprojects and mega-events is the involuntary re-
settlement and forced displacement that are often associated with infrastructure
development. Mega-events involve large stadium and transportation projects to
support an influx of visitors, and they often cause the displacement of local, low-
income residents. An estimated 720,000 low-income workers, renters, and squat-
ters were forcibly evicted to make room for the 1988 Olympic Games in Seoul,
South Korea (Davis 2007). In Atlanta, Georgia, the controversial demolition of
Techwood Homes, one of the first U.S. public housing projects, located between
the Olympic venue and the Georgia Institute of Technology campus, displaced all
global infrastructure: ongoing realities and emerging challenges 1

of its residents. Similarly, with mega-projects, particularly dams, the objectives of

infrastructure development and human development frequently collide, as Rob-
ert Picciotto notes in chapter 9. For example, Ghana’s Akosombo Hydroelectric
Project created the world’s largest artificial lake, Lake Volta, which covers nearly
4 percent of the country’s land and displaced 80,000 people, nearly 1 percent of
the population. The dam provides a substantial amount of electric power to the
West African nation and its neighbors, Togo and Benin. The reservoir behind the
Three Gorges Dam in China displaced over a million people as of 2008. Differ-
ences between resettlement standards promulgated by international agencies and
the practices applied by many governments remain unresolved.

Improving Sustainability and Efficiency

Infrastructure facilities and their services produce a variety of spillovers and ex-
ternalities for nearby activities, for metropolitan areas, and for the environment.
Electric power and transportation are energy-intensive sectors that produce emis-
sions that have local consequences (particulates and smog) and global conse-
quences (greenhouse gases). Because of the large scale of emissions, infrastructure
will bear a major burden when it comes to reducing emissions, but this burden
can become an asset when credits are granted for emission reductions—an out-
come that is being realized in some countries. Infrastructure also produces spatial
externalities because its location often helps determine the location of residential,
commercial, and industrial activities. Accordingly, locating infrastructure is an
instrument that can be used to affect spatial development patterns in both urban
and rural areas. Infrastructure also has fiscal externalities because its influence on
the location of economic activities has consequences for local employment and
tax revenues. Finally, because most infrastructure facilities have long lives, the
management and stewardship of infrastructure assets are a critical determinant
of their efficient use.
Sustainability increasingly affects infrastructure investment patterns, particu-
larly in cities in developing countries where urban populations will more than
double—increasing by 2.6 billion people—by 2050. Some governments provide
economic incentives to support long-term investments in sanitation and drain-
age systems that include green infrastructure such as green roofs, rain gardens,
and permeable pavements. Energy-efficient power generation from wind, solar,
and water sources is growing, and improved technology will decrease prices.
Institutional partnerships are critical in creating finance strategies for sustain-
able infrastructure in cities, as illustrated by Katherine Sierra in chapter 10 with
three case studies of cities facing climate change challenges. The regulation of
carbon emissions has created a market for financing sustainable energy and
transportation infrastructure in developing countries with carbon credits—pay-
ments for activities that sequester carbon or reduce emissions. Uganda’s West
Nile Electrification Project (WNEP) is the World Bank’s first sub-Saharan project
1 Gregory K. Ingram and Karin L. Brandt

to issue carbon credits. The WNEP includes a 3.5-megawatt hydroelectric power

plant and a 1.5-megawatt heavy fuel oil–fired power plant that issued more than
20,000 carbon credits. Other strategies identify environmental needs and form
responsive public-private partnerships such as the Arab Financing Facility for
Infrastructure (AFFI). The Middle East and North Africa region historically re-
ceives the smallest share of private participation in infrastructure, and the AFFI
seeks to address the pressing needs of rapid population growth and unmet in-
vestment needs by supporting public infrastructure services and public-private
partnerships that follow Islamic-compliant financing.
Analyzing the economic and environmental impacts of urban infrastruc-
ture—whether its contribution to productivity or its generation of greenhouse
gas emissions—is very challenging because urban or metropolitan infrastruc-
ture is seldom self-contained. Cities almost always import infrastructure services
(e.g., power and water) from outside their boundaries, and allocating the costs
and benefits of intercity transportation to specific cities is a difficult accounting
problem. Accounting for emissions from industrial production and household
consumption raises the issue of how to assign the carbon emissions of intermedi-
ate inputs and final production goods that originate outside the city. Promising
approaches that address this problem specify a boundary around the city or
metropolitan area and carefully analyze all transboundary flows of goods and
services to analyze both infrastructure and all other movements, as noted by
Anu Ramaswami in chapter 11. Results indicate that improvements in energy
efficiency and reductions in greenhouse gas emissions will be achieved more
readily for buildings (responsible for nearly half of urban greenhouse gas emis-
sions) than for transportation (responsible for nearly a quarter of greenhouse
gas emissions).
The location of infrastructure has a major influence on the location of resi-
dential, commercial, and industrial activity. In the United States, much has been
written about the relationship between highway networks and the spread of low-
density residential and commercial development. Less obvious is the major role
that infrastructure has played in the location decisions of industrial firms. The
growth of trucking and the spread of highway facilities in the United States un-
moored many industrial firms from locations next to rail sidings or port facilities.
The growing use of assembly lines and related production processes that work
best in a one-story rather than a multistory building increased the land area re-
quired for many manufacturing facilities. Accordingly, the use of trucking and
the need for larger sites stimulated industrial firms to move to suburban and
even exurban locations along interstate highways. This move has reduced city
tax revenue and employment in many cities as industrial enterprises and their
associated suppliers relocated. Some analysts think that a trend toward a third
industrial revolution, based on smart manufacturing, will provide incentives for
smaller industrial firms to relocate to developed urban areas and that cities need
to plan for this possibility by preserving areas for future industrial development,
global infrastructure: ongoing realities and emerging challenges 1

as Nancey Green Leigh notes in chapter 12. If cities fail to do this, they will have
little success in attracting these new smart manufacturing firms and their associ-
ated jobs.
To increase productivity and to achieve related environmental goals, infra-
structure facilities must produce high-quality services efficiently. This means that
the facilities must be maintained so that they achieve their planned useful lives
and targeted operating costs. But adequate maintenance faces many challenges,
particularly in the United States. Maintenance has large economic returns and
reduces long-term investment requirements and consumer costs, but it is often
undervalued by revenue-constrained governments. The most recent annual in-
frastructure “report card” from the American Society of Civil Engineers (2009)
issued an overall grade of D for delayed maintenance and underfunding in many
categories and estimated that poor road conditions impose costs of $67 billion
annually on U.S. motorists. Moreover, repairing neglected roads is two to three
times more costly than performing appropriate ongoing maintenance. In chap-
ter 13 Felix Rioja reviews research findings and empirical studies that indicate
that optimal levels of maintenance expenditures can increase a country’s growth
rate and have significant and positive effects on productivity. He also sheds light
on why industrialized and developing governments neglect maintenance despite
its positive effects.
While research offers some promising insights about how to improve main-
tenance and the overall performance of infrastructure provision, countries may
be able to learn from one another how to improve performance or may even
be able to transfer lessons from their strongly performing infrastructure sectors
to those with weaker performance. As noted earlier, the value of infrastructure
stocks across countries is closely associated with country incomes. However, the
performance of the various infrastructure sectors is not strongly associated with
country incomes. This is not because some countries are just better at manag-
ing infrastructure than others. It is because the performance across infrastruc-
ture sectors varies greatly within countries. The low correlation of performance
within countries means that if a country is performing well in one sector, such as
electric power, it tells one very little about how well it is performing in another
sector, such as providing telephone service. Table 1.2 uses data from 83 countries
to show that infrastructure stock levels are highly correlated across sectors, but
performance in one sector is weakly correlated with, and is a poor predictor of,
performance in other sectors within countries. In chapter 14 George R. G. Clarke
explores some reasons for this lack of correlation of performance across sectors,
and he also assesses which sector’s performance is most important to private
firms.
1 Gregory K. Ingram and Karin L. Brandt

Table 1.2
Stock Levels Are Highly Correlated, But Performance Varies Within Countries
Correlation Matrices

Performance Levels (average correlation = 0.34)

Phone-Line Electric Loss Unpaved Roads Lack of Cell Service
Faults
Phone-line faults 1.00
Electric loss 0.01 1.00
Unpaved road share 0.22 0.42 1.00
Lack of cell service 0.75 0.22 0.44 1.00

Stock Levels (average correlation = 0.79)

Phone Lines Generating Capacity Paved Road Share Mobile Subscriptions
Phone lines 1.00
Generating capacity 0.86 1.00
Paved road share 0.83 0.81 1.00
Mobile subscriptions 0.82 0.75 0.66 1.00
Source: Authors’ calculations.

Conclusions
Infrastructure, characterized by Jawaharlal Nehru as a principal element of the
commanding heights of the economy, continues to have a key role in economic
development. The value of infrastructure facilities increases in step with national
income, which is now growing more rapidly in developing countries than in in-
dustrial countries. The unprecedented expansion of the urban population of de-
veloping countries will require substantial investments in the infrastructure of
cities for the next 40 years. At the same time, there may be surprises that stem
from technological change, such as when a new technology displaces or reduces
the prominence of another. For example, in the past two decades we have wit-
nessed the explosive growth of mobile phones relative to fixed-line telephony.
Compelling evidence indicates that infrastructure investment often increases eco-
nomic productivity, although this is not true for poorly conceived projects, such
as bridges to nowhere.
Growing cities in the United States that face demands on infrastructure facili-
ties and services can use land policy to increase density and make use of economies
of scale. Infrastructure, particularly transit, has a strong relationship with density,
and reports show that cost-effective transit requires density levels of 15 people
global infrastructure: ongoing realities and emerging challenges 1

per hectare (Angel 2012). In the United States the development of highways pro-
moted density reductions of households (Alonso 1964) and of industrial firms
(Moses and Williamson 1967). This pattern of urban development has gener-
ated ongoing challenges to modify existing zoning, taxation, and fee structure
systems that support low-density development, though some U.S. cities are now
gradually increasing density levels. The lesson for cities in developing countries
is to build infrastructure and implement land policy that support dense patterns
of urban development, a point highlighted in chapter 2’s case study of Chinese
cities.
More recent research is finding that inadequate infrastructure is associated
with income inequality. This is likely linked to the benefits that good infrastruc-
ture services deliver to households in the form of direct health benefits, improved
access to education, and enhanced economic opportunities. Because much infra-
structure is energy intensive, efforts to reduce greenhouse gas emissions will need
to address infrastructure, particularly electric power and transport. It is difficult
to foresee what impacts policies to reduce greenhouse gas emissions will have on
these sectors, but they could have large effects on households and firms. Bring-
ing the management of infrastructure up to levels of good practice has a large
economic payoff, and performance levels vary dramatically between and within
countries. Conveying the large economic returns from improving infrastructure
performance, and particularly maintenance, to policy makers and voters is a nec-
essary, but so far unmet, challenge.

references
Alonso, W. 1964. Location and land use. Cambridge, MA: Harvard University Press.
American Society of Civil Engineers. 2009. Report card for America’s infrastructure,
200. Washington, DC: American Society of Civil Engineers.
Angel, S. 2012. Planet of cities. Cambridge, MA: Lincoln Institute of Land Policy.
Borrero, O., E. Durán, J. Hernández, and M. Montaña. 2011. Evaluating the practice
of betterment levies in Colombia: The experience of Bogotá and Manizales. Work-
ing Paper. Cambridge, MA: Lincoln Institute of Land Policy.
Calderon, C., E. Moral-Benito, and L. Serven. 2011. Is infrastructure capital produc-
tive? A dynamic heterogeneous approach. Policy Research Working Paper
No. 5682. Washington, DC: World Bank.
Calderon, C., and L. Serven. 2008. Infrastructure and economic development in sub-
Saharan Africa. Policy Research Working Paper No. 4712. Washington, DC: World
Bank.
Chatterton, I., and O. S. Puerto. 2005. Estimations of infrastructure investment needed
in the South Asia region. Washington, DC: World Bank.
Davis, M. 2007. Planet of slums. New York: Verso Books.
Foster, V., W. Butterfield, C. Chen, and N. Pushak. 2008. Building bridges: China’s grow-
ing role as infrastructure financier for Africa. Washington, DC: PPIAF, World Bank.
Grübler, A. 2003. Technology and global change. Cambridge, U.K.: Cambridge Univer-
sity Press.
20 Gregory K. Ingram and Karin L. Brandt

Ingram, G. K., and Y.-H. Hong, eds. 2012. Value capture and land policies. Cambridge,
MA: Lincoln Institute of Land Policy.
Ingram, G. K., Z. Liu, and K. Brandt. 2013. Metropolitan infrastructure and capital
finance. In Financing metropolitan governments in developing countries, ed. R. W.
Bahl, J. F. Linn, and D. L. Wetzel. Cambridge, MA: Lincoln Institute of Land
Policy.
International Telecommunications Union. 2010. World telecommunications develop-
ment report. Geneva: International Telecommunications Union.
Lopez, J. H. 2004. Macroeconomics and inequality. World Bank Research Workshop,
Macroeconomic Challenges in Low Income Countries (October).
Moses, L., and H. F. Williamson Jr. 1967. The location of economic activity in cities.
American Economic Review 57(2):211–222.
Norris, P. 2002. The digital divide: Civic engagement, information poverty, and the
worldwide Internet. Cambridge, U.K.: Cambridge University Press.
Organization for Economic Cooperation and Development. 2012. Quick wizard for
international development statistics, Paris.
Pritchett, L. 2000. The tyranny of concepts: CUDIE (cumulated, depreciated, invest-
ment effort) is not capital. Journal of Economic Growth 5(4):361–384.
Straub, S. 2008. Infrastructure and growth in developing countries: Recent advances
and research challenges. Policy Research Working Paper No. 4460. Washington,
DC: World Bank.
von Thünen, J. H. 1966. The isolated state. Oxford, U.K.: Pergamon (Hamburg, Ger-
many: Perthes, 1826).
World Bank. 1994. World development report, 1: Infrastructure for development.
New York: World Bank and Oxford University Press.
———. 2012. World development indicators. Washington, DC: World Bank.
World Bank and Public-Private Infrastructure Advisory Facility. 2011. Private Partici-
pation in Infrastructure (PPI) project database. Washington, DC: World Bank.