ASi" kUCTURE FlOR DEVELOPMENT

Expansion of transport infrastructure can reduce sectors are the result of a technology-driven -infratotal
pollution loads as congestion falls, average ve- structure revolution" that has changed the way in
hide speeds rise, and routes are shortened. But road which age-old demands for water, lighting, commuimpmvements
can also encourage vehicle use and nications, and waste disposal are met
increase emissions. Therefore, additions to infra-. Not until the invention of cast-iron pipes and
structure capacity are only part of the solution. Im- steam-diven pumps did extensive water infrastrucproved
management of traffic and land use and pro- ture spread, beginning with a piped water network
motion of nomnotorized modes, cleaner fuels, and in London in the 1850s. This lowered costs (espepublic
trarnsport are also needed (see Chapter 4). In- cially in urban areas) and dramatically increased
tegrated urban planning and transport policy can use. Before the development of gas networks at the
lead to more efficient use of both land and ransport start of the 1800s, infrastructure for lighting was
capacity; with favorable environmental results. In rare. The invention of alternating-current transisthe
city of Curitiba, Brazi, an emphasis on encour- sion near the end of the centuy lowered costs of
aging enterprises and residential developments to electricity and led to new and expanded uses of
locate around caefuly designed public transport electric power, especiallyin urban tansport
ro-utes has contributed to low gasoline consump- The history of other infrastructure sectors is simtion,
low transport casts relative to household in- ilar. The public telegraph and telephones replaced
comes, and very low rates of traffic aocdents-de- hand-carried messages, and piped sewerage respite
one of the highest rates of private vehidle placed individual disposal of wastes in many comownership
in the country
munities. rrigation and transport have for centuries
Beyond urban areas, overuse of water for irriga-- utilized networks of irrigation canals and roads, altion
(which accounts for about 90 percent of water though development of altemative modes of tanswithdrawals
in most low-income countries) dam- porl (induding inland canals and railroads) has proages
soils and severely restricts water availability ceeded since the early 18OOsfor
industry and households, which often have a The most general economic characteristic of
higher willingness to pay for the quantities of water modem infrastrucure is the supply of services
they use. The inefficient burning of biomass fuel through a networked delivery system designed to
(plant and animal waste) for household energy con- serve a multitude of users, particularly for public
tnbutes to deforestation and thus to erosion and loss utilities such as piped water, electric power, gas,
of soil nutrients, as well as to indoor air pollution. telecommunications, sewerage, and rail services.
Some ifrastructure investments, especially road The delivery system is in most cases decicated, that
construction, can put unspoiled natural resources at is, it carries only one good. Investments in the delivrisk
and threaten indigenous communities. Reser- ery system (such as underground water pipes or
vons associated with hydroelectric projects, flood electric wires) are mostly irecoverable because they
control, or irrigation can give rise to environmental cannot be converted to other uses or moved else
problems, both upstream (inundation of land) and where-unlike the investment in a vehicle, for exdownstream
(sedinentation).
ample. Once paid, these costs are said to be `sunk"
Because the delivery system is networked, coordi-
Origins of the public sector role in infrastructure nation of service flows (traffic, electricity, conimunications
signals) along the system is critical to its effi-
Infrastructure's large and varied potential impacts dency. This interconnectedness also means that theon
development derive from certain technological benefits from investment at one point in the netand
economic characteristics that distinguish it work can depend significantly on service flows and
from most other goods and services. These charac- capacities at other points.
teristics make infrastructure subject to special pol- The scope for competitive supply of infastrucicy
attention.
ture varies greatly across sectors, within sectors, and.
between technologies. Where the unit costs of serv-
Production characeristics
ing an additional user decline over a wide range of
-output, economnies of scale are created-an impor-
Historically, society's needs for water supply, irriga- tant source of "natural monopoly." This is a comtion
and flood control, and transport have led to the mon term, although one best used cautiously beconstruction
of engineered physical works-many cause many infrastructure monopolies are in fact
of them quite large, elaborately designed, and en- unnatural, driven by policy and not tedhnology But
during Today's distinctively modem infrastructure sectors differ greatly in the range of declining costs-
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