Ben Shepherd and John S Wilson, Road infrastructure in Europe and Central Asia : does network quality affect trade ? (World Bank working paper, Dec 2006):
The authors present a new database of minimum distance road routes connecting 138 cities in 27 countries across Europe and Central Asia. They use it to show that improved road network quality is robustly associated with higher intraregional trade flows. Gravity model simulations suggest that an ambitious but feasibleroad upgrade could increase trade by 50 percent over baseline, exceeding the expected gains from tariff reductions or trade facilitation programs of comparable scope. Cross-country spillovers due to overland transit are important: total intraregional trade could be increased by 30 percent by upgrading roads in just three countries-Albania, Hungary, and Romania.
I learned about this, and some other good papers, from the World Bank's 11th edition of Trade and Development Quarterly: The Global Dialogue.
Wow, that's cool.
Posted by: John | April 12, 2007 at 12:09 AM