Much ado about nothing? - A meta-analysis of the relationship between infrastructure and economic growth

Investing in infrastructure is often seen as an important part of economic policy, at the regional, national as well as international level. Investing in infrastructure is often presented as a solution to a number of problems such as unemployment, depopulation of rural areas and low economic activity. A number of studies have tried to estimate the effects on production from investing in infrastructure. The aim of this study is therefore to provide a systematic analysis of previous studies of this relationship. For that purpose, a meta-analysis of 776 estimates of elasticity of production with respect to infrastructure, was performed. The estimated effect (elasticity of production) of investing in infrastructure varies from −0.06 to 0.52. The effects appear to vary depending on the type of infrastructure in with the investment is made as well as between industries. It is also found that the estimated effects exhibiting high precision, are clustered around zero. This is to say that the higher the reliability of the estimate, the closer it is to zero.