Using a newly developed data set, we analyze the effects of infrastructure investment on economic performance in Portugal. A vector-autoregressive approach estimates the elasticity and marginal products of twelve types of infrastructure investment on private investment, employment, and output. We find that the largest long-term accumulated effects come from investments in railroads, ports, airports, health, education, and telecommunications. For these infrastructures, the output multipliers suggest that these investments pay for themselves through additional tax revenues. For investments in ports, airports and education infrastructures, the bulk of the effects are short-term demand-side effects, while for railroads, health, and telecommunications, the impact is mostly of a long-term and supply-side nature. Finally, investments in health and airports exhibit decreasing marginal returns, with railroads, ports, and telecommunications being relatively stable. In terms of the other infrastructure assets, the economic effects of investments in municipal roads, electricity and gas, and refineries are insignificant, while investments in national roads, highways, and waste and waste water have positive economic effects but too small to improve the public budget. Clearly, from a policy perspective, not all infrastructure investments in Portugal are created equal.

The expansion of road networks, taken place during the last decades, was driven by technological progress and economic growth. The most innovative products of this trend—modern motorways and international road corridors—provide an excellent level of service, traffic safety and necessary information to travelers. However, despite this undeniable progress, major impediments and respective challenges to road authorities and operators still remain. The present paper analytically presents the main current challenges in the road engineering field, namely: a) financing new projects, b) alternative energy resources, especially renewable energy, c) serviceability, including maintenance of road infrastructure, traffic congestion and quality of the network, d) climate change hazards due to greenhouse gas emissions increase, e) environmental impacts, f) safety on roads, streets and motorways, and g) economy and cost-effectiveness. In each country and over each network, challenges and concerns may vary, but, in most cases, competent authorities, engaged in road development policies, have to deal with most of these issues. The optimization of the means to achieve the best results seems to be an enduring stake. In the present paper, the origin and the main features of these challenges are outlined as well as their tendency to get amplified or diminished under the actual evolving economic conditions worldwide, where growth alternates with crisis and social hardship. Moreover, responses, meant to provide solutions to the said challenges, are suggested, including research findings of Aristotle University and innovative technological achievements, to drive the transition to a more sustainable future.

This paper argues for a novel approach to financing infrastructure needs in Arab countries. It first describes the context of rising public debt in the region, contrasting it with the vast infrastructure needs. It then discusses the challenges in meeting these needs with traditional financing. The paper then makes the case for maximizing finance for development by using public-private partnerships and presents a few successful examples in Arab countries. Finally, the paper explores the way forward and concludes on the need for strong state capacity and integrity to promote the “maximizing finance for development” approach.