ABSTRACT
THE NATURE AND ROLE OF INFRASTRUCTURE The term infrastructure was defined recently (Diamond and Spence, 1989) as 'the collective and integrative basis for economic activity'. This overshort and somewhat glossy definition camouflages perhaps too many of the difficulties encountered in defining this term. In fact the word has come to mean many different things to interested commentators. Although it is usually thought of as a material item such as a transport facility or a piece of community infrastructure, most certainly it can also be thought of in non-material terms such as the educational or skill level of a workforce or the quality of public safety in an area. It is however perhaps best considered as possessing in varying quantities, according to type of infrastructure, some of the following characteristic attributes. Infrastructure provision usually involves high levels of capital expenditure. In many instances this expenditure is provided from the public purse although this notion of the publicness of infrastructure is becoming more and more blurred as the private sector plays a more important role. Much infrastructure, it can be said, is at least under public regulation or influence. Such costly public capital expenditure often only achieves low levels of productivity measured in conventional ways. It tends to service a wide variety of economic activities for a long time often at low or zero cost. Now it is not difficult to think of examples of infrastructure types which do not conform exactly to the characteristics outlined above but most exhibit many of such features. Infrastructure provision has an undoubted integrative function in the economy providing a sound social and economic foundation for
Obviously some infrastructure is required for directly productive activities to take place. The simple point is that the costs incurred by such activities should be lower the higher the levels of infrastructure provision deployed. In the view of the Commission of the European Communities 'more and better infrastructure makes a region more attractive and cuts production costs for firms; it raises their competitiveness and also provides a permanent boost to the growth of business investment, employment opportunities and incomes' (Commission of the European Communities, 1987). Given such a view about the role of infrastructure provision in the well-being of economic activities it is not surprising that infrastructure has become a prime tool of regional development. Unfortunately the strategies of infrastructure provision are not quite so straightforward. There are basically two lines of approach (Hirschman, 1958). Infrastructure can be provided in advance of development in the hope that by improving the competitive advantage of a region development will subsequently follow. Or infrastructure can be provided after sufficient development has taken place secure in the knowledge that it will be well used on the day of provision. In the former strategy (excess capacity) the opportunity cost is clearly the foregoing of the investment potential that help for directly productive activities alone may achieve. In the latter (shortage) the opportunity cost is the foregoing of the investment potential stifled by an inadequate infrastructure.
