ABSTRACT

The literature on the relationships between transport infrastructure investment and economic development provides ample evidence to suggest positive correlation between these variables. Anas (1995), for example, has shown how reductions in commuting time, resulting from subway headways improvements in New York City, will positively affect commercial and residential real estate properties. Rephann (1993) has found a positive effect of road development on economic growth at the regional level. Aschauer (1989a, 1990) provides statistical evidence showing the effect of aggregate investment in infrastructure capital (including transport) on macroeconomic measures like GDP. While these and similar evidence has been criticized on analytical and empirical grounds (Gramlich 1994), the fact remains that many researchers and policymakers strongly believe that transport infrastructure development will have a significant impact on economic growth at the urban, regional and countrywide level. Some of these arguments have been presented in Chapter 1.