Urban infrastructure
The name infrastructure (etymology: Infra = below) is that human achievement designed and directed by professionals in Engineering, Urban Planning, etc., which serve as support for the development of other activities and their operation, necessary in the structural organization of cities and companies.
Infrastructure consists of public and private physical structures such as roads, railways, bridges, tunnels, water supply, sewerage, electricity networks, and telecommunications (including Internet connectivity and broadband access). In general, infrastructure has been defined as "the physical components of interrelated systems that provide essential commodities and services to enable, sustain or improve the living conditions of society" and maintain the surrounding environment.
Especially in light of the massive societal transformations required to mitigate and adapt to climate change, contemporary infrastructure conversations frequently focus on sustainable development and green infrastructure. Recognizing this importance, the international community has created a policy focused on sustainable infrastructure through the Sustainable Development Goals, especially Sustainable Development Goal 9 "Industry, Innovation and Infrastructure".
One way to describe the different types of infrastructure is to classify them into two distinct types: hard infrastructure and soft infrastructure. Hard infrastructure refers to the physical networks necessary for the operation of a modern industry. This includes roads, bridges and railways. Soft infrastructure refers to all institutions that maintain the economic, health, social, environmental, and cultural standards of a country. This includes educational programs, official statistics, parks and recreational facilities, law enforcement institutions, and emergency services..
Definition
Infrastructure can be defined as the physical and organizational structures, networks or systems necessary for the proper functioning of a society and its economy. The different components of a society's infrastructure may exist in either the public or private sector, depending on how they are owned, managed and regulated (shared with government/private sector depending on ownership and management, as is the case in some cases). Infrastructure can be physical or social, with the two categories defined as follows:
- Physical infrastructure is public facilities that unite parts of the city and provide the basic services that the city needs for operation, such as the network of roads and public services.
- Social and economic infrastructure includes facilities such as hospitals, parks and gardens, community centers, bookstores, entertainment and shopping facilities, and educational buildings.
While the benefits of physical infrastructure are clearly tangible, the benefits of social infrastructure are often intangible.
Large infrastructure works often generate social and environmental impacts, putting the health and well-being of the affected communities at risk, which is why exhaustive environmental impact studies are required before they are carried out.
Similarly, the "green infrastructure", which is mainly made up of vegetation and soil, and whose objective is to improve the management of rainwater in environments, is also called infrastructure. built, with lateral benefits such as improvement in air quality, reduction of the "heat island" effect, etc.
Applications in modern society
Engineering and construction
Engineers often limit the term "infrastructure" to describe fixed assets that have the shape of a large network. Efforts to develop more generic definitions of infrastructure have typically referred to the network aspects of most structures, and the accumulated value of investments in networks as assets. One such definition from 1998 defined infrastructure as the network of assets "in which the system as a whole is intended to be maintained indefinitely at a specified level of service through the continuous replacement and renewal of its components".
Civil defense and economic development
Civil defense planners and development economists often refer to both hard and soft infrastructure, which includes public services such as schools and hospitals, emergency services such as police and fire services, and basic financial services. The concept of infrastructure-based development, which combines long-term infrastructure investments by central and regional government agencies with public-private partnerships, has proved very popular among economists in Asia (especially Singapore and China), continental Europe and Latin America.
Military
Military infrastructure is the permanent buildings and facilities necessary for the support of military forces, whether they are stationed on bases or deployed or engaged in military operations. For example, barracks, headquarters, airfields, communications facilities, warehouses for military materiel, port facilities, and maintenance stations.
Communications
The communications infrastructure is the informal and formal channels of communication, political and social networks, or the beliefs of members of certain groups, as well as information technology, software development tools. Underlying these more conceptual usages is the idea that infrastructure provides an organizational and support structure for the system or organization it serves, be it a city, a nation, a corporation, or a group of people with common interests. Examples include IT infrastructure, research infrastructure, terrorist infrastructure, employment infrastructure, and tourism infrastructure.
Infrastructure and economic development
The adequate and efficient availability of infrastructure services is one of the most important facets of economic development policies, especially in those countries and their regions that seek to develop competitive advantages and achieve productive specialization. Specifically, infrastructure networks constitute a central element of territorial, economic and governance integration within a given geographic-economic space. Infrastructure investments and maintenance can be very expensive, especially in areas such as the landlocked, rural and sparsely populated countries of Africa. It has been argued that infrastructure investments contributed to more than half of Africa's better growth performance between 1990 and 2005, and more investment is needed to sustain growth and address poverty. The returns on investment in infrastructure are very significant, with an average return of thirty to forty percent for investments in telecommunications (ICT), more than forty percent for electricity generation, and eighty percent for roads.
Measuring the infrastructure gap
Measurement of the relationship between infrastructure investment and economic development shows that infrastructure investments contribute to GDP growth, cost reductions, and profitability improvements, but the magnitude of this effect is not consistently positive when taken into account. They carry out analyzes of the costs and benefits of each individual project.
The literature for the study of effects makes a difference between economic infrastructure and welfare infrastructure. The first has to do with industries generally constituted in networks such as transport, telecommunications, ports, energy, etc. and the second with schools, clinics, public space. The first are the most relevant for regional transformations, however, investment decision-making processes infrequently consider a balance between investment returns and affordability for the populations that need it most. This represents a source of ex ante regional disparity. In Latin America alone, the poorest spend up to 40 percent of their income using network infrastructures.
This infrastructure access gap impacts economic development by promoting intraregional disparities in countries. When investment decisions privilege geographic location and there is an urban bias, proximity-remoteness to transport and telecommunications networks would explain a significant part of the differences in economic development results.
Investment in infrastructure
In line with the distributive implications of infrastructure, investment in infrastructure favors tradable goods (energy, telecommunications, intermodal transport) and there is a strong appreciation of the real exchange rate. For nontradables (rural roads, etc.) the appreciation of the exchange rate is weak. In other words, from the macroeconomic analysis, investment in non-tradable infrastructure benefits the poor in urban areas and, contrary to intuition, it harms rural areas. The rural poor gain access to food and some services, but lose income from production.
Corruption and infrastructure
Another aspect of the study of the impact of infrastructures on economic development is related to corruption. Despite its relevance, there is limited evidence of the quantifiable benefits obtained for those who intervene in bribery. The difference between government spending on road construction has been approximated, for example in Indonesia with a cost estimate made by engineers, showing that on average this difference is about a quarter of the total cost of the road. It has also been observed that the percentage of contracts awarded in transport tenders where only one participant is present is more likely to represent a case of corruption.
The literature that links infrastructures and corruption has focused on studying the obvious objective of many transactions, the theft of the public budget that has a monetary manifestation in the extraction of surpluses, the result of the renegotiation between the briber and the public servant. However, sometimes the orientation of investment decisions could respond to other types of motivations other than obtaining profits, such as political influence.
Bibliography and sources
- Adam, Christopher Bevan, David. (2001). Non-linear Effects of Fiscal Deficits on Growth in Developing Countries. Journal of Public Economics.
- Aschauer, David (1990); “Why Is Infrastructure Important?”; Proceedings of Conference; Federal Reserve Bank of Boston; Boston.
- Démurger, Sylvie (2001) “Infrastructure Development and Economic Growth: An Explanation for Regional Disparities in China?”
- Esfahani, Hadi Salehi and María T. Ramírez (2002); “Institutions, infrastructure, and economic growth”; Mimeo; Department of Economics, University of Illinois at Urbana-Champaign, USA
- Fazekas, M. and B. Toth. 2018. The Extent and Cost of Corruption in Transport Infrastructure. New evidence from Europe, Transportation Research Part A: Policy and Practice.
- Munnell, Alicia (1992); “Infrastructure investment and economic growth”; Journal of Economic Perspectives 6 (4).
- Olken, B. A. (2007) “Monitoring Corruption: Evidence from a Field Experiment in Indonesia” Journal of Political Economy
- OECD (2016), OECD Survey of Infrastructure Governance