Do infrastructure investments boost economic growth

Maria Bratt Börjesson

The Swedish government will spend 700 billion kronor (approximately USD72 billion) on the 2018–2029 transport infrastructure plan. A key argument for this huge budget is the widespread notion that infrastructure investments boost economic growth.

Do infrastructure investments boost economic growth. English summary 35.2 KB PDF

It is also indisputable that the develop¬ment of the Swedish railroads in the 19th century, and the extensive road expansion during the 1950s, 1960s and 1970s had transformative effects on society. But a key reason for the large effects on society was that the existing travel opportu¬nities were so limited. For instance, the travel time between Stockholm and Malmö was reduced from eight days to 19 hours when the southern main railroad opened in the 1860s. But because the transport infrastructure is already so well developed in postmodern countries, such transformational investments are no longer possible. So what is the evidence that transport investments improve economic growth today? That is the central question of this report.