Understanding Public Spending Trends for Infrastructure in Developing Countries
Evidence of public expenditure on infrastructure is extremely sparse. Little is known about the trends and patterns of infrastructure expenditure, and there is no real basis for assessing the adequacy and efficiency of infrastructure spending. Draw...
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| Language: | English |
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World Bank, Washington, DC
2022
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| Online Access: | http://documents.worldbank.org/curated/undefined/727991642167519238/Understanding-Public-Spending-Trends-for-Infrastructure-in-Developing-Countries http://hdl.handle.net/10986/36849 |
| Summary: | Evidence of public expenditure on
infrastructure is extremely sparse. Little is known about
the trends and patterns of infrastructure expenditure, and
there is no real basis for assessing the adequacy and
efficiency of infrastructure spending. Drawing on the World
Bank’s novel BOOST database, this paper provides a first
relatively disaggregated picture of infrastructure spending
trends and patterns for a large sample of more than 70
developing countries covering 2010–18, drilling down into
expenditure by sector for roads as well as electricity, and
distinguishing operating from capital expenditure.
Complementary sources of data are tapped to allow comparison
between expenditure patterns on and off budget. The study
finds that on-budget expenditure on infrastructure has been
low both in absolute terms (1 percent of gross domestic
product) and relative terms (5 percent of total public
spending), as well as declining over time. Overall,
infrastructure spending declined by about one-third over
2010–18 (with the road sector bearing the brunt of the
decrease), and now lies well below estimates of the required
levels, except in a handful of cases. There is evidence that
low-income countries, despite lower spending envelopes,
attach greater priority to public investment and
infrastructure spending than their middle-income
counterparts. Econometric analysis suggests that
infrastructure spending in low- and middle-income countries
has been historically procyclical, although to a lesser
degree than total expenditure. In the transport sector, road
funds are shown to play a substantial role in funding road
maintenance, appearing to improve the adequacy of funding,
while attenuating pronounced capital biases in road sector
spending, but there is little evidence of efficiency
improvements over time. |
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