Common Transport Infrastructure: A Quantitative Model and Estimates from the Belt and Road Initiative

François de Soyres, Alen Mulabdic and Michele Ruta

No 8801, Policy Research Working Paper Series from The World Bank

Abstract: This paper presents a structural general equilibrium model to analyze the effects on trade, welfare, and gross domestic product of common transport infrastructure. Specifically, the model builds on the framework by Caliendo and Parro (2015) -- a Ricardian model with sectoral linkages, trade in intermediate goods and sectoral heterogeneity -- to allow for changes in trade costs due to improvements in transportation infrastructure, financed through domestic taxation, connecting multiple countries. The model highlights the trade impact of infrastructure investments through cross-border input-output linkages. This framework is then used to quantify the impact of the Belt and Road Initiative. Using new estimates on the effects on trade costs of transport infrastructure related to the initiative based on Geographic Information System analysis, the model shows that gross domestic product will increase by up to 3.4 percent for participating countries and by up to 2.9 percent for the world. Because trade gains are not commensurate with projected investments, some countries may experience a negative welfare effect due to the high cost of the infrastructure. The analysis also finds strong complementarity between infrastructure investment and trade policy reforms.

Keywords: International Trade and Trade Rules; Transport Services; Rules of Origin; Trade Policy; Trade and Multilateral Issues (search for similar items in EconPapers)
Date: 2019-04-01
New Economics Papers: this item is included in nep-int and nep-ure
References: Add references at CitEc
Citations: View citations in EconPapers (16)

Downloads: (external link)
http://documents.worldbank.org/curated/en/87903155 ... -Road-Initiative.pdf (application/pdf)

Related works:
Journal Article: Common transport infrastructure: A quantitative model and estimates from the Belt and Road Initiative (2020)
Working Paper: Common Transport Infrastructure: A Quantitative Model and Estimates from the Belt and Road Initiative (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wbk:wbrwps:8801

Access Statistics for this paper

More papers in Policy Research Working Paper Series from The World Bank 1818 H Street, N.W., Washington, DC 20433. Contact information at EDIRC.
Bibliographic data for series maintained by Roula I. Yazigi ().