This Note focuses on the economic evaluation of conventional infrastructure investments, and specifically on two types of projects which may result in significant economic restructuring – relocation of economic activities, generation of new activities, or changes in the way that current activities are undertaken. The two examples used, new urban rail lines and major new barrier crossings serve simply as examples of a much wider issue. The issue considered is that whenever projects bring about a large step change in transport costs, there is a stimulus for a reorganisation of economic activity outside the transport sector. For example, a manufacturer may change the source of their raw materials or relocate their production, a retailer may centralise their operations to serve a larger market area, or a farmer may change their crops to a more marketable combination and hire labour.
World Bank, Washington D.C., USA. Transport Note No. TRN-19, 7 pp.
Projects With Significant Expected Restructuring Effects