Infrastructure and City Competitiveness in India

Somik V. Lall, Hyoung Gun Wang and Uwe Deichmann

in Urbanization and Development

Published in print October 2010 | ISBN: 9780199590148
Published online January 2011 | e-ISBN: 9780191595493 | DOI:

Series: WIDER Studies in Development Economics

Infrastructure and City Competitiveness in India

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Do local improvements in infrastructure provision improve city competitiveness? What public finance mechanisms stimulate local infrastructure supply? And how do local efforts compare with national decisions of placing inter-regional trunk infrastructure? This chapter examines how the combination of local and national infrastructure supply improve city competitiveness, measured as the city's share of national private investment. A city's proximity to international ports and highways connecting large domestic markets has the largest effect on its competitiveness. In comparison, local infrastructure services –〈M〉 such as municipal roads, street lighting, water supply, and drainage –〈M〉 enhance competitiveness, but their impacts are much smaller. While local efforts are important, they are less likely to be sufficient in cities distant from the country's main trunk infrastructure. The chapter also finds that a city's ability to raise revenues through local taxes and user fees increases infrastructure supply, whereas as inter governmental transfers do not have statistically significant effects.

Keywords: cities; India; infrastructure; urbanization; JEL classification; N95; R51

Chapter.  6933 words. 

Subjects: Economic Development and Growth

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