1. International Bureau of the Universal Postal Union Berne (SWITZERLAND) © UPU 2006 – All rights reserved ARE POSTS GOOD FOR GROWTH? Joëlle TOLEDANO (ARCEP’s Commissioner, Chair of the Postal Economics Project Group, Professor of Economics) José ANSON (Economist, International Bureau, Universal Postal Union) jose.anson@upu.int

2. Titre de la diapositive © UPU 2006 – All rights reserved International Bureau of the Universal Postal Union Is infrastructure development good for growth? What is the effect of infrastructure development on economic growth? According to a World Bank’s paper (Calderón and Servén, 2004), infrastructure development does have a positive impact on economic growth after taking into account other factors in the “estimation of a classic growth equation” Other factors (effect between parentheses) include human capital (+), financial depth (+), government burden (-), trade openness (+), governance (+), inflation (-), exchange rate overvaluation (-), terms of trade shocks (+) Yet the paper does not include posts among infrastructures … so the World Bank’s paper did not answer the question “Are Posts Good for Growth?” like telephone lines, power, road and rails

3. Titre de la diapositive © UPU 2006 – All rights reserved International Bureau of the Universal Postal Union Replicating the World Bank’s paper exercise The World Bank’s sample include 121 countries from 1960 to 2000 But postal data is currently available from 1980 to 2004 So we estimated the same growth equation as the World Bank’s paper (i.e. without including posts) for the period 1980 to 2004, and found the same results Out of the 8 common factors used by the World Bank and us, all turn out to have the same effect Then we add an additional explanatory factor in the “growth equation”: the number of inhabitants per post office in each country from 1980 to 2004 The number of inhabitants per post office can be seen as a measure of the postal network extension Hypothesis to be tested: a good enough postal network coverage triggers a positive effect on economic growth

4. Titre de la diapositive © UPU 2006 – All rights reserved International Bureau of the Universal Postal Union Are posts good for growth? The “growth equation” tells “yes” There is a statistically significant positive impact of the postal network extension on economic growth for the 1980 – 2004 period once we add the postal factor to the estimation of the “growth equation” In previous research work, we also found a statistically significant positive impact of the postal network extension on the volumes of domestic mail per capita in developing countries So the postal network extension matters for economic growth as well as for volumes of exchanged mail in developing countries So the postal network extension matters for economic growth as well as for volumes of exchanged mail in developing countries

5. Titre de la diapositive © UPU 2006 – All rights reserved International Bureau of the Universal Postal Union Do posts matter more or do they matter less for economic growth? Neither more … nor less … than other factors We compared the impact of the postal network extension relative to the other factors influencing economic growth in the “growth equation” The result is that posts matter as much as other factors which help explain economic growth across countries for the period 1980-2004 … This suggests to carry out in-depth research about the economic and social impacts of the evolution of the postal network in a number of developing countries so as to even better assess the role of posts in poverty reduction (e.g. Brazil, Morocco, South Africa) This suggests to carry out in-depth research about the economic and social impacts of the evolution of the postal network in a number of developing countries so as to even better assess the role of posts in poverty reduction (e.g. Brazil, Morocco, South Africa)

6. International Bureau of the Universal Postal Union Berne (SWITZERLAND) © UPU 2006 – All rights reserved ARE POSTS GOOD FOR GROWTH? YES http://www.upu.int/postal_economics/en/index.html jose.anson@upu.int