Impact of public infrastructure on economic growth

Infrastructure and its effects on both economic development and regional integration are a key concern for decision-makers and stakeholders at local national and regional levels in industrialized countries and even more so in developing economies. However the effects of infrastructure on economic variables are not always identifiable and vary according to the type of infrastructure the economic sectors and the economic level of the region affected by the investment. Based essentially on the theoretical results of endogenous growth models (Barro 1990) and using a three-equation simultaneous model that takes into account the interdependence of explained variables (Duffy-Deno and Eberts method 1991) our results highlight a positive causality between public infrastructure and growth in regional per capita income. Hence public spending on infrastructure remains a proven source of economic growth within ECOWAS. In turn per capita income is an important determinant of public infrastructure development.