Aghion, Philippe 
ORCID: 0000-0002-9019-1677 and Schankerman, Mark ORCID: 0009-0006-1071-7672
(2000)
An analytical framework for evaluating transition impact of infrastructure projects.
.
European Bank for Reconstruction and Development, London, UK.
Abstract
This paper provides a non-technical summary of a framework for evaluating the transition impact (social returns) of any infrastructure investment that reduces transaction costs and thereby intensifies product market competition. The framework applies both to physical and institutional infrastructure. We show that infrastructure generates welfare gains by improving the ability of the market to weed out existing inefficient firms ("market selection"), by changing the incentives for firms to lower their costs by restructuring, and by providing greater (less) incentives to enter for low (high) cost potential entrants. We illustrate by simulation analysis that conventional cost-benefit analysis is not likely to capture these dynamic transition impacts of infrastructure.
| Item Type: | Monograph (Working Paper) |
|---|---|
| Official URL: | http://www.ebrd.com |
| Additional Information: | © 2000 European Bank for Reconstruction and Development |
| Divisions: | Economics STICERD |
| Subjects: | H Social Sciences > HD Industries. Land use. Labor |
| JEL classification: | L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L13 - Oligopoly and Other Imperfect Markets O - Economic Development, Technological Change, and Growth > O2 - Development Planning and Policy > O22 - Project Analysis O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O12 - Microeconomic Analyses of Economic Development L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L11 - Production, Pricing, and Market Structure; Size Distribution of Firms |
| Date Deposited: | 28 May 2008 13:54 |
| Last Modified: | 11 Dec 2024 18:28 |
| URI: | http://eprints.lse.ac.uk/id/eprint/5123 |
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