In recent assessments of nowadays most important socio-economic drive, road infrastructure development is calling for a fundamental transformation, which can be admitted as “Road Infrastructure Revolution” considering the massive and strategic investments required for. In order to substantiate this specific infrastructure revolution, it appears necessary to analyze the potential benefits of road infrastructure development and their repercussions on an effective and efficient implementation of the Sustainable Development Goals (SDGs).
In effect, roads are the arteries through which the economy pulses. By linking producers to markets, workers to jobs, students to school, and the sick to hospitals, roads are vital to any development agenda. However, while roads bring economic and social benefits, they can also come with social costs such as pollution or deforestation.
In developed economies, road infrastructure development and improved transport technology over the last century have resulted in a continuous decline in transport costs, which in turn stimulated growth and economic development.
Investing in road infrastructure development will reduce costs leading to an increase in productivity and shifting the economy to a higher growth equilibrium. Empirical tests at the macroeconomic level confirm road development can have a significant impact on growth.
Trade
- Road infrastructure development may stimulate the volume of trade, open up new markets, induce new industries to form, and thereby influence the patterns of trade.
- Road development may also reflect improvements in inter-city transportation, which are likely to affect the diversification or specialization of cities.
- Road infrastructure development can impact trade in lowered interregional trade cost and price gaps, increased trade flows, and increased real income per unit of land area.
- cities can attract manufacturing, business, and household service firms as result of accessibility caused by road development.
Economic Activity, Income, And Employment
- increased trade and productivity because of road infrastructure development results in greater production, improved labour market outcomes and higher incomes.
Structural Transformation
- Improved road developments may lead to the structural transformation of local economies. In rural communities, road development may result in a shift from subsistence to commercial agriculture.
- Influx of people and businesses to a locality because of improved road networks can also lead to a shift of production and labour away from agriculture sector. Improved road networks can increase job creation in the manufacturing sector and triggers an occupational shift of workers from agriculture to manufacturing.
Rural Poverty
- Accessibility because of road development in rural areas results in reduction of poverty, including through higher agricultural production, higher wages and lower input costs, and higher output prices.
Urban Labour Markets
- Lack of roads or bad road infrastructure can deter the unemployed from accepting distant jobs. There are the harmful effects of long commutes on productivity or decreasing productivity.
- Robust empirical studies have shown a causal effect of job decentralization on the unemployment of the less mobile inner-city poor. In this context, there is an important role for road infrastructure development to better connect people to jobs.
- Bad roads also induce women entrepreneurs to locate their business closer to their residences, thus missing out on the benefits of agglomeration in business districts.
Education
- Upstream to the labour markets, road infrastructure also has an impact on educational opportunities and choices. Improved roads leads to higher rates of enrolment in educational institution.
Health
- Better roads lead to better health care delivery. Transportation of the sick and the aged to health centre are faster and less stressful.
Spatial Impact
- Road development infrastructure can greatly impact a community as result of high degree of residential development, changes in access to facilities and services, change in land uses and informal developments.
Negative Socio-Economic Impacts
- Road infrastructure development may have important social costs, which need to be balanced against potential positive economic impacts. These costs involve negative externalities, ranging from congestion, accidents, impact on health caused through air pollution and the easier spread of epidemics, as well as direct costs to the environment such as deforestation, biodiversity loss, and more generally degradation of ecosystems. In the long run, some of these negative effects may even be harmful to growth. Road development thus have a role to play to minimize and mitigate negative impacts.
In conclusion, AGIC can summarize at glance the reverberations of the road infrastructure development as follows:
- That road infrastructure investment holds the key to improving standard of living as a well-developed transport infrastructure is associated with improved access to markets and services, and also positively affects income levels due to lower transport costs. It has as well a positive impact on the pricing on consumer goods and services and indicates that economic infrastructure includes investments in related services that raise the productivity of other types of physical capital such as transport, power, water systems, and communication on one hand. On the other hand, social infrastructure includes investment that increase the productivity of human capital, such as education and health. In addition, investment on road infrastructure attracts from the private sector in the form of “investment in trade and business, transport services and enabled mobility of the factor of production”.
- The benefits of investment in road infrastructure in rural areas particularly, are amplified through private investments even though that privatisation with an expectation of profit from the developers by means of construction profits or tolling arguably reflects on the fact that road infrastructure development is one that serves a common good which cannot always be monetized.
- Meanwhile, depending on the circumstances a country find itself in, the dictates of the Bretton woods institution’s Public Private Partnership has driven most of the countries around the world to enter into the privatisation (partial or total) of public services.