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Reviewed by:
  • Infrastructure Development in the Pacific Region
  • Linda Low
Infrastructure Development in the Pacific Region. Edited by Akira Kohsaka. New York: Routledge, 2007. Pp. 256.

This volume has an overview and eleven country chapters comprising Australia, Canada, China, Hong Kong, Japan, Korea, Malaysia, New Zealand, the Philippines, Singapore, and the United States. It is based on a study by the Pacific Economic Outlook (PEO) Structure, a task force under the Pacific Economic Cooperation Council (PECC) for projections and quantitative analysis. It is replete with statistics and figures, with six chapters’ empirical estimates confirming the positive relationship between infrastructure-growth nexus and productivity.

Two trends are clearly underscored: private sector participation in infrastructure development punctuation somewhat by the Asian financial crisis and non-physical infrastructure including human and knowledge-based capital besides traditional infrastructure. Information communication technology has revolutionized electronic highways for over-the-wire or electronically mediated connectivity. The volume aims to draw implications for policy incentives to support a broader set of alternative providers of infrastructure, further challenged by diverse developmental stages in the PECC region and changing role of government with public-private partnerships in infrastructure.

The overview chapter addresses the knowledge-based economy in the context of new technologies which impinge on institutions both in functions and modalities of infrastructure provision. Privatization and contracting-out have implications on ownership, management, finance and other operations. The overview on the current infrastructure status in the region draws on the World Bank for information and studies given its role in financing infrastructure. In addition, the PEO estimates of output elasticity of infrastructure investment suggest strong spillover effects with Japan as a case study.

Among some policy issues raised, public investment is a declining trend among mature advanced economies in contrast to more privatization since the 1908s in developing economies, especially in non-physical, soft infrastructure in the knowledge-based economy. It is heartening to know that the Pacific emerging market economies have caught with the advanced economies on new infrastructure, though the gap between emerging markets and other developing economies remains in terms of output in personal computers. What seems remiss in the overview as hard-to-knit-together highlights of country chapters for overall PECC-wide policy implications is perhaps compensated by specific country details of uneven quality.

Typically as for all chapters, Australia by Tony Makin and Satya Paul starts with the historical context and role of government at different levels as the traditional infrastructure provider, with the private sector more involved in a range of public private arrangements. Data from national accounts are supplemented by a review of empirical studies of public infrastructure on productivity growth under different approaches (production, cost and profit functions), noting a general equilibrium model for social rates of return is beyond the chapter.

Kim Storey on Canada estimates the economic impact of infrastructure, noting different types of infrastructure (energy, transportation, telecommunications and social) under various levels of government and highlighting the importance of provincial and local levels especially in health care and education. Estimates of the economic impact of infrastructure for 1961–2000 have reasonable results. Like other advanced economies, Canada ponders how best to renew [End Page 244] and expand infrastructure with diverse interests from the environment to innovation. Slow deregulation with political implications means less private sector participation in infrastructure compared to Australia.

Guoqiang Yue’s review of China’s infrastructure development since 1978 is distinctly of a planned economy in five-year plans across the largest PECC economy with expected large regional diversity. Since the 1990s, government reforms in infrastructure management system focused on corporatization more than privatization. But the government has loans from international financial institutions and foreign investment to finance infrastructure especially in energy and transportation sectors, which are open to foreign capital.

The contrast in Hong Kong by Kwong Yiu Tang is unsurprising with less government and more private sector involvement in infrastructure. The emphasis on information communication technology is clear together with transportation for entrepÙt trade and tourism gateway for China. The government as regulator ensures competition while lumpy infrastructure investment by the private sector to earn returns has a long gestation period to reap economies of scale. Explicit policy suggestions include encouraging...


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