PLANNING FOR A SUSTAINABLE EUROPE? - TU Berlin

46
2.2.2 Macroeconomic aspects of transport investments
Much confusion persists over the growth potentials of infrastructure investments.
The simplistic notion that cities and regions will necessarily grow stronger with increased
trade and interaction does not carefully enough distinguish between different
beneficiaries, i.e. the economic interests of a) existing businesses in a particular city or
region whose production and service costs will be affected by the improvement of
infrastructures, b) consumers/employees inside the region, c) businesses outside the
region who supply the region with products and services and/or receive products, services
or labor from it (or wish to do so in the future) and d) consumers/laborers outside the
region. All too often, economic growth potential is only assessed in terms of the benefits
accrued by local firms, not residents. It is thus worth considering several macroeconomic
dynamics in more detail.
2.2.3 Reduction of transport cost
Traditionally, the reduction of travel costs has been the most important factor by
which economists calculated the economic benefits of road improvements. In theory,
road investments are supposed to lead to an overall lowering of transport costs, most
notably through the reduction of delivery and access times. Improved transport
conditions increase the market range for producers. However, in mature economies such
as Western Europe and the US, this has rarely proven to be a significant factor in
production patterns (SACTRA1999). Even the European Commission now admits that
transport costs represent less than 5 percent of the total production cost of goods and