Time Sequence and Nature of Impacts of Transport Investments

Time Sequence and Nature of Impacts of Transport Investments

There is no straightforward relationship between transport and economic development as the level of impact and its time sequence can vary based on location and socioeconomic characteristics. This leads to five potential relationships:

  • Weak relationship (1). Although transportation supports economic and social activities, no specific causality can be expressed. This is particularly the case for infrastructures that have been implemented a while ago, becoming embedded in the regional economy. Their lead role can no longer be asserted, but it does not mean that transportation is not important as it is still a fundamental component supporting mobility within the economy.
  • Positive and lead impacts (2). Represents the best-case scenario where investments and the presence of infrastructures triggers economic growth for a region, namely the expansion of production and consumption. This process commonly occurs when new infrastructures are built to access resources or new markets, which then triggers a wave of investments.
  • Lag and positive impacts (3). The development of transport infrastructures follows economic development. A good example would be fast-paced growth, as seen in Pacific Asia (notably China), where investments in transport infrastructure do not keep up with the substantial growth of the traffic generated by rising mobility and new globally linked manufacturing functions. Such a situation could eventually impair future growth prospects as the existing infrastructure can no longer satisfy the demand.
  • Lead and negative impacts (4). Commonly involves infrastructure investments made with the expectation of triggering development but failing to meet those expectations. Many negative outcomes have been observed. For instance, infrastructure can be built at a great cost. Simultaneously, they fail to generate significant additional traffic, leaving the community with a substantial debt that cannot be recovered and that will drain regional wealth. On the other hand, transportation could generate traffic, but the new accessibility benefits external economies with improved access to the regional market. Local resources, either physical (commodities) or human (emigration), can also be “drained” away by transport improvements.
  • Lag and negative effect (5). This represents the worst-case scenario. In addition to the negative consequences of transportation investments on the economy (drain on resources), these investments occur after the downward spiral began and may even accelerate the process.