In this episode of VoxDevTalks, Martina Kirchberger discusses the economics of infrastructure and the construction sector. Kirchberger begins by clarifying what she means by infrastructure:
“I typically have in mind the core arteries of an economy. So, think of the roads, the bridges, the highways, airports and supportive infrastructure, electricity, water, sewage systems. And then there is social infrastructure, buildings that are used as hospitals, as schools.”
Infrastructure is central to enabling wider economic activity but proving a direct link to growth is complex. As Kirchberger notes, countries with good infrastructure also tend to implement many complementary policies, making identification difficult. Still, the complementary role of infrastructure is undeniable:
“They’re sort of key to enable economic activity in all kinds of other sectors. At the same time, they’re also a source of wasteful spending... historically, we also know that there are roads built to nowhere. And so, I think getting the spending right is really important.”