ESRI Discussion Paper Series No.51
Public Infrastructure and Economic Growth:
An Empirical Analysis of the Long-run Effect of Road Investment

July, 2003
Toru Nakazato
(Sophia University;
Visiting Fellow, Economic and Social Research Institute, Cabinet Office)

The full text is written in Japanese.

(Abstract)

We investigate the impact of road construction on economic growth using the Japanese prefectural data for the period 1960-1999. Our main findings are as follows. The construction of major roads forming the nationwide network had a positive effect on growth in less developed regions over the 1960s and 1970s. The result is consistent with the view that road construction enhances growth by reducing the transportation cost and expanding the extent of the market. Road investments, however, have been unproductive since the 1980s. These findings imply that the efficiency and effectiveness should be more closely examined when road construction projects are being carried out.

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