In Bangladesh the investment patterns and criteria under which resources are allocated among competing sectors and projects may have created an imbalance in the distribution of investment among production factors as well as among regions, resulting in economic inefficiency. For this reason, the role of transportation investment in the regional economic development of Bangladesh is examined in detail. The data envelopment analysis (DEA) technique is used to examine the technical efficiency of investment in transportation infrastructure development for each region of the country. Investment in infrastructure development of the less-efficient regions is found to be more effective by providing a higher rate of return. DEA is used to identify investment priorities for specific regions, and their relative impacts are assessed. It is shown that future transportation investment should focus on peripheral regions; for the rest of the country, industrial investment is found to be more beneficial.
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