Identifying Spatial Efficiency–Equity Tradeoffs in Territorial Development Policies : Evidence from Uganda

In many countries, place specific investments in infrastructure are viewed as integral components of territorial development policies. But are these policies fighting market forces of concentration? Or are they adding net value to the national economy by tapping underexploited resources? This paper contributes to the debate on the spatial allocation of infrastructure investments by examining where these investments will generate the highest economic returns "spatial efficiency", and identifying whether there re tradeoffs when infrastructure coverage is made more equitable across regions "spatial equity". The empirical analysis focuses on Uganda and is based on estimating models of firm location choice, drawing on insights from the new economic geography literature. The main findings show that establishments in the manufacturing industry gain from being in areas that offer a diverse mix of economic activities. In addition, availability of power supply, transport links connecting districts to markets, and the supply of skilled workers attract manufacturing activities. Combining all these factors gives a distinct advantage to existing agglomerations along leading areas around Kampala and Jinja. Infrastructure investments in these areas are likely to produce the highest returns compared with investments elsewhere. Public infrastructure investments in other locations are likely to attract fewer private investors, and will pose a spatial efficiencyequity tradeoff. To better integrate lagging regions with the national economy, lessons from the WDR2009 "Reshaping Economic Geography" calling for investments in health and education in lagging areas are likely to be more beneficial.

Bibliographic Details

Main Authors:	Schroeder, Elizabeth, Lall, Somik V., Schmidt, Emily
Language:	English
Published:	2009-06-01
Subjects:	ACCESS TO TECHNOLOGY, ACCESSIBILITY, ADVERTISING, AGGLOMERATION ECONOMIES, AGRICULTURE, BUSINESS ENVIRONMENT, BUSINESS PROCESSES, BUSINESS SERVICES, BUSINESSES, BUYERS, CD, CITY SIZE, COMPETITIVENESS, CONGESTION, CONGESTION COSTS, CONNECTIVITY, CONSUMER GOODS, COST FUNCTIONS, DEVELOPMENT ECONOMICS, DEVELOPMENT POLICIES, ECONOMIC ACTIVITIES, ECONOMIC ACTIVITY, ECONOMIC CONCENTRATION, ECONOMIC DEVELOPMENT, ECONOMIC DIVERSITY, ECONOMIC EQUITY, ECONOMIC GEOGRAPHY, ECONOMIC GROWTH, ECONOMIC INTEGRATION, ECONOMIC PERFORMANCE, ECONOMICS, ECONOMICS LITERATURE, ELECTRICITY, EMPLOYMENT, EQUILIBRIUM MODELS, EQUITY IMPLICATIONS, EXTERNALITIES, FINANCIAL CRISIS, FINANCIAL SERVICES, GLOBAL STANDARDS, GPS, GROWTH STRATEGY, HOUSING, HUMAN CAPITAL, INCREASING RETURNS, INDUSTRIAL DEVELOPMENT, INFORMATION SHARING, INFRASTRUCTURE DEVELOPMENT, INFRASTRUCTURE INVESTMENT, INFRASTRUCTURE POLICIES, INNOVATION, INNOVATIONS, INTERNATIONAL INVESTMENT, INTERNATIONAL TRADE, LAND PRICES, LARGE CITIES, LIVING STANDARDS, LOCALIZATION, MANUFACTURING, MANUFACTURING INDUSTRIES, MANUFACTURING INDUSTRY, MARKET ACCESS, MOBILITY, MONOPOLISTIC COMPETITION, NATIONAL ECONOMY, NATURAL RESOURCE, NATURAL RESOURCES, NET VALUE, NETWORKS, NEW ENTRANTS, NEW TECHNOLOGIES, OPPORTUNITY COST, OPTIMIZATION, PETROLEUM INDUSTRY, PETROLEUM PRODUCTS, PHYSICAL LOCATION, PIXEL, POLITICAL ECONOMY, POPULATION GROWTH, PRESENT VALUE, PRIVATE INVESTMENT, PRODUCT DIFFERENTIATION, PRODUCTION COSTS, PRODUCTION INPUTS, PRODUCTIVITY, PROFITABILITY, PUBLIC POLICY, RAILROAD, REGISTRY, RELIABILITY, RESULT, RESULTS, ROAD, ROAD CONDITIONS, ROAD DEVELOPMENT, ROAD IMPROVEMENTS, ROAD NETWORK, ROADS, SERVICE PROVIDERS, TELECOMMUNICATION, TRAFFIC, TRAFFIC VOLUME, TRANSPORT, TRANSPORT CORRIDORS, TRANSPORT COSTS, TRANSPORT IMPROVEMENT, TRANSPORT IMPROVEMENTS, TRANSPORT INFRASTRUCTURE, TRANSPORTATION, TRAVEL SPEEDS, TRAVEL TIME, TRAVEL TIMES, URBAN DEVELOPMENT, URBAN ECONOMICS, URBANIZATION, USES, UTILITY FUNCTION, VALUATION, VEHICLE, VEHICLE OPERATING, VEHICLE OPERATING COSTS, VEHICLE-KILOMETERS, VEHICLES, WAGES, WEB,
Online Access:	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20090617160143 https://hdl.handle.net/10986/4160
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