1. Global Infrastructure Stocks: World Bank ‘Canning’ Paper H. Scott Matthews January 29, 2003

2. Recap of Last Lecture  Everything we build eventually becomes obsolete  Due to many factors (tech, society, etc)  Thus, we need to plan for that  Difference between physical/service life  Service life defined by expected obsol.

3. Before the Paper..  Recent data from the World Bank…  Significant infrastructure differences

4. Expectations  So we don’t lose sight of global relevance of these issues..  Data on previous slide implies WHAT?  Expect less economic output  Lower educational levels  Cause or effect?

5. Canning Paper  “A Database of World Infrastructure Stocks, 1950–95”, David Canning, World Bank Paper #1929, June 1998  Main stock dataset available on web  152 countries, generally 45 yrs  Some countries no data until recently  What is/is not included in data?

6. Measures in Dataset  Roads, Paved Roads (km)  Railway lines (km)  Number of telephones  Number of telephone main lines  KW electricity generating capacity  Some infrastructure quality measures  Condition of roads, Percent dropped calls, electricity system losses  What could this data be used for?

7. Sample Data - Electricity  US capacity 80 TW 1950  700 TW 1995 (~10x increase)  World capacity 200 -> 2500  So what?  Do these numbers tell us anything important?  What kind of values would we want instead?

8. Canning Paper  Econometric study of infrastructure stocks as related to:  Economic growth  Population Change  Investment  ‘Full report’ available on web:  http://www.worldbank.org/html/dec/Publications/ Workpapers/WPS1900series/wps1929/wps1929- abstract.html (bottom of this page)

9. Conclusions  Non-transportation infrastructure stocks tend to increase 1:1 with population  Increase more than 1:1 with per-cap GDP  Geographic factors appear to affect provision of non-trans in poor countries  But not in rich countries  Transport. Infras. Increases less than 1:1 with population  Increases with income only after threshold reached  Do these conclusions surprise us?