scholarly journals Infrastructure Quality and the Subsidy Trap

2015 ◽  
Vol 105 (1) ◽  
pp. 35-66 ◽  
Author(s):  
Shaun McRae
Keyword(s):  
Developing Countries ◽  
Low Income ◽  
Structural Model ◽  
Private Investment ◽  
Distribution Networks ◽  
Electricity Demand ◽  
Alternative Programs ◽  
Investment Incentives ◽  
Unreliable Supply ◽  
Low Income Households

Electricity and water are often subsidized in developing countries to increase their affordability for low-income households. Ideally, such subsidies would create sufficient demand in poor neighborhoods to encourage private investment in their infrastructure. Instead, many regions receiving large subsidies have precarious distribution networks supplying users who never pay. Using a structural model of household electricity demand in Colombia, I predict the change in consumption and profits from upgrading low-quality electricity connections. I show that the existing subsidies, which provide greater transfers to areas with unreliable supply, deter investment to modernize infrastructure. Finally, I analyze alternative programs with stronger investment incentives. (JEL H23, H54, L94, L98, O12, O13)

Micro study of low-income households in India: a poverty expectation hypothesis?

2018 ◽  
Vol 10 (1) ◽  
pp. 2-14
Author(s):  
Ashish Pandey
Keyword(s):  
Developing Countries ◽  
Lived Experience ◽  
Low Income ◽  
Financial Intermediaries ◽  
Large Sample Size ◽  
Structured Interviews ◽  
Job Interviews ◽  
Content Type ◽  
Conversational Interviews ◽  
Low Income Households

Purpose The purpose of this paper is to explore whether existing theories on saving behaviour and empirical findings on the determinants of saving behaviour can be generalised for the low-income households in developing countries. Design/methodology/approach The paper adopts Van Manen’s hermeneutic phenomenology approach. Semi-structured interviews were conducted with female household members that belong to low-income households and do not have any member of the household with a permanent job. Interviews were conducted in the cities of Bangalore and Indore in India. Lived experience of participants was captured using conversational interviews and thematic analyses. Findings The paper provides evidence that the existing literature on saving behaviour is inadequate in explaining either the saving behaviour or the determinants for saving for low-income households in developing countries. This paper finds evidence of poor institutional access and reliance on informal financial intermediaries for low-income households. Research limitations/implications This paper establishes the need for a qualitative study with a large sample size to determine the policy interventions and institutional drivers that will encourage low-income households to migrate from the informal financial intermediaries to formal banking institutions. Originality/value To the best of author’s knowledge, this is the first qualitative paper aimed at understanding saving behaviour of low-income households. Extant literature is focused on normative economic frameworks that bear limited relation to the contextual realities of low-income households in the developing countries.

Infrastructure Investment and Growth in Developing Countries: Does the Type of Contract Matter?

2012 ◽  
Vol 4 (2) ◽  
pp. 139-152
Author(s):  
Marco Percoco
Keyword(s):  
Developing Countries ◽  
Low Income ◽  
Public Investment ◽  
Private Investment ◽  
Public Private Partnerships ◽  
Low Income Countries ◽  
Extensive Literature ◽  
Infrastructure Projects ◽  
Private Participation

The aim of this article is to verify whether public investment in infrastructure is effective in terms of growth. While there is extensive literature analysing the effect of public capital stock on development and growth, comparatively less attention has been devoted to the contractual mechanisms characterising this investment. In this article, we focus on private participation in infrastructure projects through forms of public–private partnerships and verify whether the use of such contracts promotes economic growth. By analysing the performance of 81 developing countries over the period 1991–2008, we found that public–private partnerships are particularly relevant in terms of growth for high-income countries, whereas we could not find significant effect for low-income countries. We interpret this result as evidence of the relevance of better institutions, especially in terms of quality of regulation and rule of law, for attracting private investment in infrastructure projects and then for promoting growth.

The Performance of PPPs in Developing Countries

2020 ◽  
pp. 22-51
Author(s):  
James Leigland
Keyword(s):  
Developing Countries ◽  
International Organizations ◽  
Low Income ◽  
Project Success ◽  
Private Investment ◽  
Low Income Countries ◽  
Global Evidence

Precisely how have PPPs underperformed? This chapter reviews global evidence relating to: (i) how widely PPPs are actually used in developing countries; (ii) the commercial profitability associated with these projects; (iii) the costs and complexities of project preparation; (iv) the ability of such projects to generate private investment finance; (v) the pro-poor benefits of these projects; and (vi) the institutional and political problems that limit project success. In light of this evidence, how practical are recent efforts by international organizations to promote increases in the number and size of PPPs in developing countries. The G20’s recent advocacy of “transformational” PPPs as mechanisms for dealing effectively with infrastructure challenges in low-income countries is an example of this kind of PPP promotion.

Trends in private investment in developing countries

1995 ◽  
Author(s):  
Frederick Z. Jaspersen ◽  
Anthony H. Aylward ◽  
Mariusz A. Sumlinski
Keyword(s):  
Developing Countries ◽  
Private Investment
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