Economic Consequences of Transport Improvements

T.R. Lakshmanan and Lata R. Chatterjee

Transportation specialists agree that investments in transport infrastructure can generate large developmental payoffs throughout society. But how those effects come about is not readily understood.Variables such as the state of the transportation network, the region’s stage of economic development, the competitive structure of the region’s markets, and technological and institutional changes in transportation, communication, and production systems all affect improvements and the changes they generate, as well as how the overall economy responds. As these contexts vary, so do underlying forces of change, and the consequent social and economic effects. To study them, we can classify these effects along temporal (short-term, long-term) and spatial (local, regional, global) scales. Short-term effects tend to be easier to recognize than long-term ones, but many of the richest effects are subtle and take a long time to be realized.

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