Few otherfacetsofsocial andeconomic life are sopoorly understood and yet
so indisput- ablyvital for prosperous development as irifrastructure.
Sincetheearly 1980sresearchers and policy makers in various OECD nations
have started to readdress the issue ofinfra- structure investments. This
renewed interest has been promptedby a varietyofconcerns. One
observation was that such investments were declining from levels which
mighthave been inadequate in the first place. A second observation was
that the timing of these cutbacks in infrastructure spending seemed to
roughly coincide with lower rates of growth in outputorproductivity.
This raised the intriguing question ofwhetherthe latter might be
attributable to the former. Coulditbe
thatinfrastructureinvestmentscontrolan economy's rate of productivity
growth? The response in many countries has been to initiate
theirownresearch in an attempttoverify orrejectthis hypothesis. But the
more welearn abouttheroleofinfrastructure anditsrelationships with
therest of the economy, the more complicated it seems to be. Time itself
is quite difficult to accommodate given the wide variety ofspeeds
atwhich differentpartsofaneconomycan adjust. Because of this inherent
complexity, we tend to break the problem down into "bite-sizedchunks",
thereby enabling us toisolate the parts ofinterest to us - such as the
impact of infrastructure on productivity. In this way we can ignore the
complex inter- actions betweenour areaofinterest and the restofour
world. By saying ceteris paribus, we overlook many otherkey
infrastructuralimpacts like those on theenvironmentandon ouroverall
qualityoflife. This distorts the true picture.
