Journal of Infrastructure Development

Projects and reforms targeting infrastructure services can affect consumer welfare through changes in the price, coverage, or quality of the services provided. The benefits of improved service quality—while significant—are often overlooked because they are difficult to quantify. This article reviews methods of evaluating the welfare implications of changes in the quality of infrastructure services within the broader theoretical perspective of welfare measurement. The study outlines the theoretical assumptions and data requirements involved, illustrating each method with examples that highlight common methodological features and differences. The article also presents the theoretical underpinnings and potential applications of a new approach to analysing the effects of interruptions in the supply of infrastructure services on household welfare.

Infrastructure investment is a central part of the stimulus plans of the Latin American and the Caribbean (LAC) region as it confronts the growing financial crisis. This article estimates the potential effects on direct, indirect and induced employment for different types of infrastructure projects with LAC-specific variables. The analysis finds that the direct and indirect short-term employment generation potential of infrastructure capital investment projects may be considerable—averaging around 40,000 annual jobs per US$ 1billion in LAC, depending upon such variables as the mix of sub-sectors in the investment programme; the technologies deployed; local wages for skilled and unskilled labour; and the degrees of leakages to imported inputs. While these numbers do not account for a substitution effect, they are built around an assumed ‘basket’ of investments that crosses infrastructure sectors most of which are not employment-maximising. Albeit limited in scope, rural road maintenance projects may employ 200,000 to 500,000 annualised direct jobs for every US$ 1billion spent. The article also describes the potential risks to effective infrastructure investment in an environment of crisis including sorting and planning contradictions, delayed implementation and impact, affordability and corruption.

Zones are popular instruments in developing countries for pursuing export-led growth strategies. Developing countries have built zones as models for selective policy applications and for easier integration into the world economy. India is not an exception. However, the recent Special Economic Zones (SEZs) that have come up following the SEZ Act of 2005 have created several controversies. These include concerns over accentuation of economic divides and industrial relocation. This article examines the rationale behind zone-based growth strategies and studies the international evidence on zones. It also looks closely at India’s earlier and current experience with zones. It finds that India’s new SEZs are following specific locational patterns on account of discriminatory incentive structures that are also inducing distinct product-orientations in these zones.

While in practice, infrastructure decentralisation is gaining ground in developing countries, it is not clear that it is supported by robust literature on its capacity to deliver superior growth and poverty reduction outcomes. Rather, a number of social goals seem to be behind the push for decentralisation. While these lofty goals should be encouraged, the trade-off with economic efficiency can be quite high, particularly when proximity considerations are not weighed vis-à-vis capacity challenges that face sub-national governments. By looking at the literature and showing some results from benchmarking of Nigerian states, we attempt to show in this article that the capacity challenge at sub-national governments is potent. The article also outlines a number of other considerations that need to be incorporated while deciding the effective levels of decentralisation and what services should be in the basket of decentralised sectors. It posits that the procedure and factors affecting such a decision remain context-specific, and where the goals are economic, should be supported by equally context-specific empirical analysis.

The Index of Drinking Water Adequacy (IDWA) was first introduced in the Asian Water and Development Outlook 2007, a report issued by the Asian Development Bank. The computation of the index (more recently christened IDWA-I) calls for data on five different parameters—resources, capacity, access, quality and use. For 28 Indian states, we could manage to obtain data on four parameters (resources, access, capacity and quality) and for an additional 15 states on ‘use’ also. All data refer to 2001 or years close to that. Access, however, has two variants—general access that refers to access to water via taps, hand pumps and tube wells; and ‘optimal access’ via taps within residential premises. The two variants provide the basis for computing IDWA-I and IDWA-II. Inter-relationships between the two and between them and a couple of development indicators are also explored and implications noted. It is gratifying to note from the inter-correlations that there is really no second best to a tap in a house when it comes to human development.

As pressures mount to develop intensive business operations along a coastline prized for its natural beauty, varied plant and wildlife and archeological sites, it is important to present decision makers with a full analysis of all values associated with the area. In this study, we examine whether the benefits of business development along the Rosh Haniqra Marine Reserve in northern Israel indeed outweigh the costs of potential damages to the region’s delicate natural balance. The analysis of business value was carried out on the basis of a detailed survey of facilities operating within the proposed reserve area and assessment of their expansion plans. The non-market benefits associated with conservation of the reserve were estimated according to two independent methods—Contingent Valuation (CVM) and Travel Cost (TCM). Our analysis reveals that under certain assumptions, non-market values of the coastline are higher than its commercial value. Thus, while further analysis is required to investigate the interaction between the number of visitors and the ecological performance of the site, it may already now be concluded that the preservation value is quite significant and should be taken into account in development plans for the region.