ABSTRACT

In Chapter 6 we examined models aimed at capturing the impacts of changes in the aggregate capital stock on national and regional growth. We have shown that at the present level of knowledge it is impossible to determine unequivocally that expansion of the existing public capital stock (including transportation infrastructure) will encourage economic growth. Even if we could conclude with a reasonable degree of certainty, that further investment in the total capital stock promotes growth, it is necessary to recognize that such investments are carried out incrementally, as individual projects are planned, approved and executed one at a time. Underlying this process of project implementation is a project evaluation process whose main objective is to determine the economic and social contribution of a particular project to societal welfare, including economic growth.