PLANNING FOR A SUSTAINABLE EUROPE? - TU Berlin

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the qualitative aspects of the infrastructure in question is especially problematic.
Gramlich (1994) presents an important review essay on the debates. Boarnet’s (1997)
more recent review article on highways and economic productivity also discusses
implications for policy reform in the US context. R. Martin (1999:143ff) discusses
several mid-1990s studies that lend support to Aschauer’s hypothesis for the EU context.
In particular, Seitz and Licht (1995) look at the West German Länder during the 1971 and
1988 period, and Mas et al. (1996) look at Spain. However, the specific emphasis in
these studies is on whether public capital has cost-reducing and productivity-enhancing
effects on the private sector. In other words, their interest is only in whether private firms
benefit, not the resident populations. Wherever these studies find evidence for positive
inter-regional spillover effects from network enhancement, they also find that these
effects decline over time.
In the end, Aschauer, while providing an important ideological boost to proinvestment
professionals and politicians, is not very useful in helping decision-makers
with either the location or even the concrete nature of the investments. Boarnet (1997)
noted: “The most reasonable interpretation of the production function literature is that the
US infrastructure stock is well developed, such that further public capital investment will
have little additional economic impact.” Also, when summarizing recent U.S. literature,
Rephann and Isserman (1994) found that when looking at the economic effects of
highway construction, empirical studies have broken down the causal links into three
different dimensions, looking at effect over time, by industry and by region. They also
insist that study periods need to be divided into construction and post-construction stages,