Highways to heaven: Infrastructure determinants and trends in Latin America and the Caribbean

Abstract

Inadequate infrastructure has been widely viewed as a principal barrier to growth and development in Latin America and the Caribbean. This paper provides a comprehensive overview of infrastructure in the region and highlights key areas in which infrastructure networks can be enhanced. The public and private sectors play complementary roles in improving the infrastructure network. Therefore, it is critical to strengthen public investment management processes as well as the regulatory framework, including to ensure and appropriate mix of financing and funding for projects and to address environmental concerns.

Weakness in Investment Growth: Causes, Implications and Policy Responses

“…Public investment that increases the fiscal deficit in an environment of tight monetary policy, large government debt, and limited economic slack can "crowd out" private investment (Mankiw 2012 (Cavallo and Daude 2011;Warner 2014;Presbitero 2016). In contrast, public investment has been found to "crowd-in" private investment (through positive effects on prospective demand and activity, and increased investor confidence) in some EMDEs, including the lowest-income countries and those with stronger institutional safeguards but sizable infrastructure needs (Cavallo and Daude 2011;Dreger and Reimers 2014;Eden and Kraay 2014;Bahal et al 2015;Cerra et al 2016).…”