The Determinants of Infrastructure Development in Developing Countries

M Q Dao

Studies in Economics and Econometrics, 2008, vol. 32, issue 3, 43-54

Abstract: This paper examines the determinants of infrastructure indicators in developing countries. Based on data from the World Bank and using four samples of developing economies, the study applies the least-squares estimation technique in a multivariate linear regression and finds that infrastructure indicators are linearly dependent upon the share of public expenditures on pensions in Gross Domestic Product, public spending for education as a percentage of government expenditures, the share of public spending for health in GDP, public saving as a percentage of GDP, and civil service wages as a fraction of government spending. The study also finds that only private spending for telecommunications as a percentage of GDP is statistically significant in explaining cross-country variations in the number of fixed and mobile telephone lines. Statistical results of such empirical examination will assist policy makers in those countries to identify areas of the budgets that need to be reallocated in order to improve infrastructure sectors and thus stimulate economic development.

Date: 2008
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DOI: 10.1080/10800379.2008.12106456

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