Underutilized Potential
This study constructs a microdata set of about 143,000 firms to estimate the monetary costs of infrastructure disruptions in 137 low- and middle-income countries, representing 78 percent of the world population and 80 percent of the GDP of low- and -middle-income countries. Specifically, this study assesses the impact of transport, electricity, and water disruptions on the capacity utilization rates of firms. The estimates suggest that utilization losses amount to $151 billion a year -- of which $107 billion are due to transport disruptions, $38 billion due to blackouts, and $6 billion due to dryouts. Moreover, this study shows that electricity outages are causing sales losses equivalent to $82 billion a year. Firms are also incurring the costs of self-generated electricity, estimated to amount to $64 billion a year (including annualized capital expenditure). At almost $300 billion a year, these figures highlight the substantial drag that unreliable infrastructure imposes on firms in developing countries. Yet, these figures are likely to be under-estimates as neither all countries nor all types of impacts are covered.
| Main Authors: | , , , , |
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| Format: | Working Paper biblioteca |
| Language: | English |
| Published: |
World Bank, Washington, DC
2019-06
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| Subjects: | NATURAL DISASTER, ELECTRICITY, WATER SUPPLY, POWER OUTAGE, BUSINESS ENVIRONMENT, RESILIENT INFRASTRUCTURE, INFRASTRUCTURE INVESTMENT, FIRM PRODUCTIVITY, TRANSPORTATION INFRASTRUCTURE, CAPACITY UTILIZATION, |
| Online Access: | http://documents.worldbank.org/curated/en/336371560797230631/Underutilized-Potential-The-Business-Costs-of-Unreliable-Infrastructure-in-Developing-Countries https://hdl.handle.net/10986/31919 |
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| Summary: | This study constructs a microdata set of
about 143,000 firms to estimate the monetary costs of
infrastructure disruptions in 137 low- and middle-income
countries, representing 78 percent of the world population
and 80 percent of the GDP of low- and -middle-income
countries. Specifically, this study assesses the impact of
transport, electricity, and water disruptions on the
capacity utilization rates of firms. The estimates suggest
that utilization losses amount to $151 billion a year -- of
which $107 billion are due to transport disruptions, $38
billion due to blackouts, and $6 billion due to dryouts.
Moreover, this study shows that electricity outages are
causing sales losses equivalent to $82 billion a year. Firms
are also incurring the costs of self-generated electricity,
estimated to amount to $64 billion a year (including
annualized capital expenditure). At almost $300 billion a
year, these figures highlight the substantial drag that
unreliable infrastructure imposes on firms in developing
countries. Yet, these figures are likely to be
under-estimates as neither all countries nor all types of
impacts are covered. |
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