Infrastructure Foundations - (Paperback)

Book Synopsis

Infrastructure is fundamental to development. Services provided by the energy, transport, and digital sectors enable access to jobs, economic opportunities, and essential services such as health and education, while improving the affordability and availability of goods and services. Beyond these direct effects, infrastructure generates important indirect benefits through urban agglomeration economies, including knowledge spillovers, innovation, positive externalities in education and health, and greater resilience to economic and environmental shocks. When infrastructure is available, of good quality, and affordable, it boosts productivity and economic growth and plays a central role in poverty reduction. This report presents the first exhaustive global database on physical infrastructure assets, covering energy generation capacity, transmission lines, roads, railways, and digital infrastructure such as cell towers, data centers, and fiber-optic cables. Assets are geolocated at detailed administrative levels, enabling fine-grained spatial analysis of infrastructure gaps. The resulting dataset supports a comprehensive global assessment of infrastructure stocks, costs, and social returns across more than 150 countries. Building on this evidence, the report develops a policy framework to guide infrastructure investmentmdecisions. The framework allows policy makers to identify infrastructure gaps and prioritize investments under resource constraints. It estimates social rates of return at the country-sector level and compares them with countries' borrowing costs to derive efficiency ratios. This approach helps assess whether investment in a given sector is justified and how returns compare across sectors. The results indicate particularly high social returns to transport investments in developing countries, while returns in the energy sector display more heterogeneous patterns. Efficiency ratios suggest that, in most countries, investment opportunities in energy, transport, and digital infrastructure exceed borrowing costs, pointing to widespread underinvestment and the potential for a "big push," especially in Sub-Saharan Africa. In terms of prioritization, transport investments tend to yield higher efficiency ratios in regions with lower capital stocks, whereas energy investments dominate in richer regions with more developed infrastructure. Overall, the findings highlight the importance of mixed investment strategies that leverage complementarities across infrastructure sectors.