Using a newly-developed data set for Portugal, we analyze the industry-level effects of infrastructure investment. Focusing on the divide between traded and non-traded industries, we find that infrastructure investments have a non-traded bias, as these shift the industry mix towards private and public services. We also find that the industries that benefit the most in relative terms are all non-traded: construction, trade, and real estate, among the private services, and education and health, among the public services. Similarly, emerging trading sectors, such as hospitality and professional services, stand to gain. The positive impacts on traded industries are too small to make a difference. These results highlight that infrastructure-based strategies are not neutral in terms of the industry mix. Moreover, with most of the benefits accruing to non-traded industries, such a development model that is heavily based on domestic demand may be unsustainable in light of Portugal’s current foreign account position. 

The provision of infrastructure and related services in developing Asia via public–private partnership (PPP) increased rapidly during the late 1990s. Theoretical arguments support the potential economic benefits of PPPs, but empirical evidence is thin. This paper develops a framework identifying channels through which economic gains can be derived from PPP arrangement. The framework helps derive an empirically tractable specification that examines how PPPs affect the aggregate economy. Empirical results suggest that increasing the ratio of PPP investment to GDP improves access to and quality of infrastructure services, and economic growth will potentially be higher. But this optimism is conditional, especially on the region’s efforts to further upgrade its technical and institutional capacity to handle complex PPP contracts.

By reviewing US state-level panel data on infrastructure spending and on per capita income inequality from 1950 to 2010, this paper sets out to test whether an empirical link exists between infrastructure and inequality. Panel regressions with fixed effects show that an increase in the growth rate of spending on highways and higher education in a given decade correlates negatively with Gini indices at the end of the decade, thus suggesting a causal effect from growth in infrastructure spending to a reduction in inequality through better access to education and opportunities for employment. More significantly, this relationship is more pronounced with inequality at the bottom 40 percent of the income distribution. In addition, infrastructure expenditures on highways are shown to be more effective at reducing inequality. By carrying out a counterfactual experiment, the results show that those US states with a significantly higher bottom Gini coefficient in 2010 had underinvested in infrastructure during the previous decade. From a policy-making perspective, new innovations in finance for infrastructure investments are developed, for the US, other industrially advanced countries and also for developing economies.

Asian Infrastructure Investment Bank’s president Mr. Jin Liqun shares with JIPD Editor-in-Chief, Dr. Gu Qingyang, his passion for infrastructure finance, as he reflects upon his goal of steering an environmentally friend and corruption-free AIIB toward building social-impacting infrastructure across Asia.
From governmental departments to international financial institutes, Mr. Jin Liqun has undertaken almost every essential role in finance. With his vast experience across the private and public sectors, particularly in multilateral development banks, Mr. Jin Liqun currently serves as Asian Infrastructure Investment Bank (AIIB)’s first President since its founding in 2016, following a stint as Secretary-General of the Multilateral Interim Secretariat created to establish the bank. Beginning from his two decades of governmental experience at the Chinese Ministry of Finance, rising from the rank of Deputy Director General to Vice Minister, Mr. Jin was then called to serve as Vice President, and then Ranking Vice President, of the Asian Development Bank, and later as Alternate Executive Director for China at the World Bank and at the Global Environment Facility. Mr. Jin had also served as Chairman of China International Capital Corporation Ltd., China’s first joint-venture investment bank, in addition to serving as Chairman of the Supervisory Board of the sovereign wealth fund China Investment Corporation and as Chairman of the International Forum of Sovereign Wealth Funds.