The Role of Public Infrastructure in Urban Economic Development

Abstract

This article reviews selected research on linkages between infrastructure and economic development. While numerous studies point to significant effects of infrastructure investment on regional and national output, employment growth, and firm openings, the effects of differences in infrastructure stock on the economic performance of municipalities and neighborhoods within metropolitan areas have been left relatively unexplored. The empirical evidence of infrastructure's impact on economic performance may imply more than generic calls for increased investments across broad categories of public capital; infrastructure research and planning need to be differentiated by type (e.g., water and sewer vs. highways, industrial vs. residential, and so forth). Moreover, the regional development perspective may not be sufficient; care needs to be taken to consider the effects on development within the metropolitan area. The evidence thus far suggests that infrastructure issues be more fully incorporated into comprehensive economic development planning at all levels of government.