Notwithstanding the improved growth performance of India, development disparity across its states has widened in the first two decades of the 21st century. This book examines development drivers of Indian states and what the necessary course corrections could be to achieve balanced regional growth. The book begins with a discussion on the evolution of growth and inequality across the states and delves into decomposing growth. It looks at three broad themes which are decomposition of growth and determinants of TFP, impact of Infrastructure on growth and inequality, and the institutional dimension of growth and explains why they are pivotal for sustainable growth in Indian states. This book will be a useful reference to those interested in understanding growth and inequality in India.
Cover -- Table of Contents -- I. Introduction -- II. Evaluation of Infrastructure Needs -- III. The Model -- A. Firms -- B. The Government -- C. Households -- D. Market Clearing Conditions -- IV. Calibration -- V. Results -- A. Baseline Model -- B. Fiscal Stabilization Packages and Welfare Implications -- C. Government Inefficiencies -- D. External Shocks: A Decrease in Tariffs Revenues -- VI. Conclusion -- References -- Tables -- Table 1. Calibration of Key Parameters -- Table 2. Welfare Comparison -- Table 3. Welfare Comparison -- Figures -- Figure 1. Infrastructure Spending Needs -- Figure 2. Existing Capital and Operation and Maintenance Spending -- Figure 3. Investment in Infrastructure Sectors as Percentage of GDP -- Figure 4. Efficiency Scores - LIC Countries -- Figure 5. Baseline Case - Only Taxes Adjust to Close the Fiscal Gap -- Figure 6. Allowing for Public Debt to Close the Fiscal Gap -- Figure 7. Only Consumption Tax Adjusts to Close the Fiscal Gap -- Figure 8. Only Labor Tax Adjusts to Close the Fiscal Gap -- Figure 9. Only Capital Tax Adjusts to Close the Fiscal Gap -- Figure 10. The Macroeconomic Consequences of an Increase in Efficiency -- Figure 11. The Macroeconomic Consequences of a Decrease in Tariffs Revenues.
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Efficient distribution of human and goods transport has always been an important element in maintaining the economic systems cohesion. Together with the economic and technological development, the purposes to attain this goal have considerably evolved. The integration of the Centre, Eastern and South-Eastern European countries' infrastructure in the European transport networks has as a main goal the promotion of networks' interconnection and interoperability. This is done through concentrating upon some specific infrastructure routes located on the trajectory of 10 pan-European transport corridors, which pass through geographical zones in many countries, some of them EU members, and others undergoing a process of negotiation (Turkey). Pan-European Corridors will have immediate effects like: the growth of investments in infrastructure thanks to European funds – for developing countries, this will represent an important part as it welcomes a development of the economy, especially in crises; the favouring of conditions for the functioning and administration of globalization; the growth of cooperation both among Eastern countries and between such countries and Western countries; conditions for the recovery of economic differences between West and East; conditions for the recovery of the development in accordance with the policy of European countries and other candidate countries. ; peer-reviewed
Infrastructure investments are critical in spurring economic activities and delivering social services. Good infrastructure such as roads, bridges, sea and airports, connects less-developed communities to the hubs of goods and services. Good infrastructure also means providing facilities to tend to the needs of industries that drive the economy. The Philippines lags behind its ASEAN neighbors in basic infrastructure support - ranking 90th out of 144 countries in the Global Competitiveness Index (GCI) 2015-2016.1 The budget expenditure of four out of live concerned government agencies responsible for road improvements is below 35 percent.2 At the local level, political influence generally determines invest ment decisions, resulting in uneven investments for local infrastructure. Local government investments are also less than 20 percent of the required costs, resulting in poor maintenance of road assets. Program matic funds for local roads maintenance is virtually non-existent since devolving the function in 1991. Such low investment for infrastructure undermines the country's ability to compete globally and affects doing business in the country.
Governments have a choice whether to intervene in the transport infrastructure sector to manage, finance and own the assets of the sector, or to rely on markets and private sector actors for the provision of these systems. In this article the development of rail and road infrastructure in Sweden and the choice between government and market provision of these systems are analyzed from a co-evolutionary perspective. Technology, economics, and politics have influenced the government's policy formation and decisions on organizational models over time, such as the nationalization of roads and railroads in the 1930s-40s. The aim for improved economic efficiency and reduction of cost differences between different parts of the country rather than political ideology explain why roads and railroads were nationalized. Through adjusting its ownership role and policy content the government has, over time, accommodated to the different influences from technology, economics and politics. The government's ownership of transport infrastructure has not been challenged since the nationalization. This could be seen as a sign of a successful gradual policy adjustment from the government's side, thereby avoiding private sector solutions.
Governments have a choice whether to intervene in the transport infrastructure sector to manage, finance and own the assets of the sector, or to rely on markets and private sector actors for the provision of these systems. In this article the development of rail and road infrastructure in Sweden and the choice between government and market provision of these systems are analyzed from a co-evolutionary perspective. Technology, economics, and politics have influenced the government's policy formation and decisions on organizational models over time, such as the nationalization of roads and railroads in the 1930s-40s. The aim for improved economic efficiency and reduction of cost differences between different parts of the country rather than political ideology explain why roads and railroads were nationalized. Through adjusting its ownership role and policy content the government has, over time, accommodated to the different influences from technology, economics and politics. The government's ownership of transport infrastructure has not been challenged since the nationalization. This could be seen as a sign of a successful gradual policy adjustment from the government's side, thereby avoiding private sector solutions. ; QC 20130614
We analyse the reform process in the German railway sector. We take a look at the process and the outcome of the reform and compare it with the theoretical findings. The regionalisation of the regional rail passenger services is of a special importance to us. We scrutinise the contracts for the provision of these services and try to find interrelations between the different contract elements. A further emphasis is placed on the influence of the European Commission on the reform process. We analyse the European Commissions policy on railway infrastructure charges and the charging principles to be found in the member states. In the following we summarise the contents of the three subsequent chapters. In chapter 2, we analyse the rail reform process that started in the year 1994. Our focus is set on the long-distance passenger transport and the freight transport, while the regional rail passenger transport is left to chapter 3. We identify the main stakeholders and their interests. The negotiations between the politicians and the managers of the railway company in the reform process are analysed using a bargaining model. Assuming opportunistic behaviour of politicians, we explain some issues of the railway reform in Germany. We adapt a model which was developed by Shleifer & Vishny in 1994. Public firms are seen as a vehicle for the government to win elections. State-owned enterprises produce benefits for the politicians in the form of excess employment or other output. If the government chooses to cut its control over the firm, there is still the possibility to influence the firm by subsidies. We present some evidence that the model's prediction were realised with the corporatisation in 1994. It can be acknowledged as far as the employment is concerned, as it rapidly decreased after 1994. In long-distance passenger transport and in freight transport, restructuring processes were pursued. The performance in both segments decreased after 1994, at least in terms of market shares. There is also evidence that infrastructure was closed down after the commercialisation. However, the effect of the commercialisation on the infrastructure is not as eminent as for the employment or the transport services, as a total closing down of rail infrastructure has to be approved by the authorities. Another question is whether the commercialisation of the DB AG led to an increase in subsidies, as predicted by the model. We find that the model's predictions are ambiguous if there is a simultaneous increase in the political costs of subsidies, which is quite likely to have happened. As a part of the reform of the German rail sector, the organisation of the local and regional rail services was changed in 1996. The intention was to create a more transparent procurement of the transport services. In chapter 3, we describe the institutional framework and the market structure. Our special focus is on the design of the contracts between the public authorities and the railway undertakings. These contracts are analysed using a unique data base. They exhibit a remarkable heterogeneity not only in terms of duration and network size but also concerning the degree of service specification and risk allocation. We try to establish interrelations between some design features of the contracts. In a first regression, we find that the contract duration is dependent on the annual train kilometres, the time span between the publishing of the tender and the start of the services, and the provision of public instruments to mitigate the risk from rolling stock investment. For a second estimation, we create a measure for the completeness of the service contracts. We find that the completeness is determined by the time span between the publishing of the tender and the start of the services, the provision of demand information, and the obligation to become a member of the regional public transport association. The rail infrastructure of each of the European Union's member states is used by different rail undertakings. The allocation of this infrastructure capacity is done using charging systems. The European Commission has strived to open the railway markets since the beginning of the 1990s by influencing the price regulation. The core element of the "First Railway Package" was a directive to shape the charging systems across the member states. In chapter 4, we identify standard pricing principles do be used for rail infrastructure. The economic aims of the pricing principles are contrasted with the content of the above mentioned directive. Scrutinizing the charging systems of different member states it is found that there is a broad variety in terms of the level of charges and their structure. We use the theoretical and empirical findings to formulate recommendations to enhance the rail infrastructure charging systems.
The following document presents three essays in the economics of transportation policy. The provision of transport infrastructure remains largely a government function and with the increase in population and vehicle ownership, travel demand management is increasing in scope. Policies aimed to reduce the negative externalities associated with travel, namely congestion and air pollution, have been increasing both on the federal and state levels. In the aftermath of the 1970's oil crises, government role in shaping vehicle fuel economy was considered essential. This paved the road to the Corporate Average Fuel Economy (CAFÉ) standards, which mark one major policy approach in transportation. However, in the early 2000's U.S. fleet fuel economy was decreasing and it became clear that CAFÉ standards are not sufficient to encourage both the supply and demand for fuel-efficient vehicles. With the growing concerns over the impact of greenhouse gas (GHG) emissions on climate change and, together with the lack of regulatory action on the federal level, states sought to craft their own transportation policies that address these needs. California has been a leader in transportation policy that addresses vehicles' GHG emissions and has paved the road for other states to adopt stringent environmental standards. The first essay presents an analysis of California's Clean Air Vehicle Sticker program, which provided single-occupancy privileges to hybrid vehicles on High Occupancy Vehicles (HOV) lanes. Such privileges have been granted by a few states with the goal of stimulating demand for hybrid vehicles. Using microdata of new vehicle sales, I investigate the effects of the program, giving special attention to the phases of its implementation. I find that the initial period of the program had the most effect on sales volume, and present evidence that vehicle prices increased during the second phase. Contrary to previous investigations I find that the program, on average, increased sales of hybrid vehicles by 20%. Furthermore, I show that the sales of vehicles not eligible for access rights were positively affected by the program. The second essay surveys congestion pricing theory and policies in California. Congestion costs in California are substantial and increasing, leading the California legislature to explore the use of congestion pricing schemes to manage congestion in the state's major metropolitan areas. I examine the nature of the CAVS program as a time savings subsidy, and comment on Valuation of Time of California drivers who received such benefits. I find that providing some hybrid vehicles with HOV access privileges capitalized in their value, increasing it by nearly $3000. The last essay provides a historical overview of U.S. transport emissions, tracing transport CO2 emissions by mode for 1960-2008. Changes in emissions are divided into components related to overall population and economic growth, transport mode shift, changes in the ratio of fuel used to passenger or tonne-km of activity, and changes in the CO2 content of fuels. A decomposition of these changes using Log-Mean Divisia Index and Laspeyres method is provided, illuminating the role of each factor that contributed to the rise in emissions. From this decomposition I speculate to what extent each factor would be important in the future, and what other factors could reduce emissions. This thorough decomposition is imperative for the crafting of transport policy that aims to address climate change.
AbstractThis paper investigates the effect of transport infrastructure on the spatial distribution of population over two millennia. Focusing on the Sui Canal, one of history's greatest infrastructure projects, we show that its completion in the 7th century CE led to a strong increase in population concentration along the newly established transport artery. We exploit the fact that large parts of the canal fell into disrepair after the 12th century to analyze the persistence of this effect. We find that in 2010, more than 800 years after the Sui Canal fell into disuse, regions once directly connected to the canal are still more populous than areas that never had access. However, this population concentration is not mirrored in economic development. GDP per capita is lower in areas that lay along the course of the canal. One potential explanation for this finding is a change in the value of locational fundamentals as well as a shift in investments to the benefit of coastal regions since the initiation of the Open Door Policy in 1978.
{This thesis uses the tools of applied econometrics to study the impact of economic incentives on household welfare and decision-making and the environmental outcome of urban transportation policies in the U.S. and in developing countries.Transportation is an essential component of day-to-day life. An extensive transportation system offers mobility, expanding individuals' access to employment opportunities, agglomeration benefits to firms and employees, reduced trade costs, and an overall increase in productivity. The positive effects of an efficient transportation network in an economy are often accompanied by rising motorization rates. This, in turn, can lead to air pollution, road congestion, and increasing dependence on fossil fuels. In the past few decades, climate change concerns have made policymakers and governments agencies in both developed and developing countries incentivize improvement in fuel economy of vehicles as well as promote alternative fuel vehicles.Alternative fuel vehicles currently arriving in the market offer better driving performance compared to their predecessors, and their market penetration is higher than before. However, most people still do not consider these alternative fuel vehicles as a substitute of traditional gasoline cars. Incentives offered to consumers to promote adoption have achieved varied results. The first chapter of the dissertation studies the stated vehicle transaction decisions of 3,154 survey respondents located in the state of California. While the effectiveness of policy incentives like tax credits and rebates is found to be more universal, the effect of High Occupancy Vehicle (HOV) lane permit or free parking benefit on adoption decision depends on the likelihood of the household being able to use the benefits. In addition, familiarity with an alternative fuel technology is found to be positively correlated with the preference for electric battery or hydrogen fuel cell vehicles. Prior ownership of a hybrid vehicle made the household more likely to purchase an alternative fuel vehicle in the future. This persistence in choice behavior can be attributed to heterogeneity among vehicle purchasers or considered as a sign of positive experience. Experience can reduce skepticism about alternative fuel vehicles and induce future adoption. Accounting for the number of years of ownership of alternative fuel vehicles, the results show that more experience has a positive effect on the probability of repurchase of the same or a newer technology vehicle. This result contributes towards a long standing debate of whether the incentives work only as a marketing mechanism or does it have any long term benefits. The positive correlation in preference pattern and the willingness to pay measures indicate that even if the price-based incentives work as a marketing mechanism they play an important role in initiating potential state dependence in purchase behavior to improve adoption in the long run. In recent years, emerging economies like India and China have been experiencing the externalities related to increased motorization. Urbanization accompanied with increasing per capita income has led to a rise in private automobile demand. Historically, the infrastructure of major metropolitans in these emerging economies was not designed to support a sudden rise in the use of automobiles. As a result, a majority of these metropolitans suffer from congestion and pollution from greenhouse gas (GHG) emissions. The local government and policymakers in these economies are considering a variety of policies like to scrap old polluting vehicles, impose fuel standards, cordon tolls, and driving restrictions to address these issues. Driving restrictions has been implemented in several metropolitan cities in emerging economies like Beijing, China, Santiago, Chile, Mexico City, Mexico, S\~{a}o Paulo, Brazil, Bogot\'{a}, Colombia, and recently New Delhi, India. According to this policy, cars with license plate numbers ending with certain digits are allowed to be driven on separate days of the week. A number of studies have shown that though the license plate based policy is effective in the short run in reducing local pollutants as well as GHG emissions, it is not effective in the medium or long run. In spite of these results, it is considered more equitable compared to price-based policies like congestion tax or a cordon toll that may impose a greater financial burden on the low-income commuters. At present, there is a limited number of studies that consider the distributional effect of the policy. The second chapter on license-plate-based driving restriction policy considers the distributional effect of the policy in comparison to a cordon toll and a vehicle mile tax by analyzing the mode choice of commuters in Santiago, Chile. Analysis of different policy scenarios suggests that though the restriction has a negative distributional effect on all commuters, in the absence of a revenue recycle mechanism the effect is less adverse in comparison to a vehicle mile tax or a cordon toll for the same level of reduction in total car trips.Transportation and the power sector are the leading sources of GHG emissions in the U.S. Policies and programs trying to reduce GHG emissions from the power sector like the federal Clean Power Plan, rebates and tax credits for the adoption of rooftop photovoltaic cells, and the renewable portfolio standard incentivizes investment in renewable energy resources. The programs have increased the share of renewable resources in the grid but, utilities are finding it hard to integrate these intermittent sources of energy into the regular dispatch module. In the transportation sector, the policy focus has mostly been on encouraging adoption of electric vehicles (EV). The latter has zero tailpipe emissions but has to be connected to the grid to operate the vehicle. Electricity pricing will play a major role in dealing with this quandary. The third chapter on electricity pricing and EV charging behavior considers the environmental impact of shifting from tiered or block pricing structure to a time-of-use rate structure that matches consumption with the time-varying cost of electricity production. The results provide evidence supporting the decision to change the pricing structure as marginal emissions of carbon dioxide is lower under the time-of-use rate structure compared to the tiered pricing plan. Moreover, the analysis of emissions in each time-of-use period brings forth the importance of defining the periods such that utilities and environmentalists can maximize the benefits of EV adoption and the increasing share of renewable energy resources in the power sector.
This is a book about infrastructure networks that are intrinsically nonlinear. The networks considered range from vehicular networks to electric power networks to data networks. The main point of view taken is that of mathematical programming in concert with finite-dimensional variational inequality theory. The principle modeling perspectives are network optimization, the theory of Nash games, and mathematical programming with equilibrium constraints. Computational methods and novel mathematical formulations are emphasized. Among the numerical methods explored are network simplex, gradient projection, fixed-point, gap function, Lagrangian relaxation, Dantzig-Wolfe decomposition, simplicial decomposition, and computational intelligence algorithms. Many solved example problems are included that range from simple to quite challenging. Theoretical analyses of several models and algorithms, to uncover existence, uniqueness and convergence properties, are undertaken. The book is meant for use in advanced undergraduate as well as doctoral courses taught in civil engineering, industrial engineering, systems engineering, and operations research degree programs. At the same time, the book should be a useful resource for industrial and university researchers engaged in the mathematical modeling and numerical analyses of infrastructure networks.
This report assesses the literature on the inter-relations between the economy and security with particular focus on terrorism and the "human drivers of insecurity" to identify both available knowledge and crucial research gaps. In addition, the report surveys the European research capacity in the field of security economics. The study is based on a thorough literature survey of the newly emerging field of security economics, using a variety of electronic catalogues and search engines as sources. The study reveals that it is not just terror attacks but also security measures of private and public agents responding to the threat of terrorism that incur significant repercussions for the economy, often with trans-national consequences. Impacts vary with the maturity of an economy; appropriate ex ante and ex post policies are critical to contain the damage of terrorism. Given the dynamic nature of human-induced insecurity, policies should place emphasis on "systemic resilience". Gaps in the economic security literature include insufficient knowledge of the behaviour of terrorists and their targets. Furthermore, the global impacts of terror attacks and especially of security measures require more analysis. Future research requires a more rigorous conceptual framework, methodological improvements and, above all, better data. In comparison to the United States, the current research capacity in security economics in Europe is weak. On the one hand, there is significant research potential in the field of security economics within the European Union in the shape of several high quality researchers. On the other hand, the existing research infrastructure and institutional barriers both inhibit this potential from being developed academically and for policy advice. Establishing a European network of security economists and funding a European centre for security economics could contribute to remedy this situation.
