ASi" kUCTURE FlOR DEVELOPMENT

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E-- -Foreword World Development Report 1994, the seventeenthi in eration, and maintenance of. infrastructure is also this annual series, examines the li-nk between infra- key to' better performance, particularly in areas structure and development and explore ways in where competition is constrained. whichL developing countries can imnprove both the Several trends are helping to imnprove the perforprovision and the quality of infrastructure services. mance of infrastructure. First, innovation in tech- Like the health and environment topics -of the two nology and in the regulatory, managementt of mar-. previous reports in this. series, infratructur is an kets makes more diversity possi'ble in-the supply of area in. which governument policy and finance have services. Second, an evaluation of the role of govan important role to play because of its pervasive emnment is leading to a shift from direct governimnpact on econom-ic development and human wel- ment prvson of services to increasing private sechire. . ~~~~~~~tor provision-and recent experience in many In recent decades, developing countries have countries with public-private partnerships is highmade substantial investments in infrastructure, lighting new ways to increase efficiency and exachieving dramatic gains for households and pro- pand servces. Third, increased concern about social ducers by expanding their access to services such as and envirornmental sustafinability has heightened safie water, sanitation, electric power, telecomnmuni- prublic interest in infrastructur design and perforcations, and trainsport. Even more infrastructure in- mance. vestment and expansion are needed in order to ex- Differences between and w ithin infrastructure tend the reach of services-especially.to people sectors, together wfith major vanlations in country living in rural areas and to the poor. . .~~~~~~7. needs and capacities, mean that the detailed design~ But as this report shows, the quantity of invest- and implementation of policy reform must be.tai--. ment cannot be the exclusive focuis of policy. [in- lored to specific cases. But there is no question that proving the quality of infrastructure service also is. the overall benefits, fr-om improving infr-astructure vital. Low operating efficiency, iniadequate mainte- are large. Roughly $200 bilion is invested in the secnance, and lack of attention to the needs of users tor annually in the developing world, and the sayhave all played a part in reducing the development ings that would accrue from better provision and impact. of infrastructure investments in the past. performance would be substantial. More efficient, Both quantity and quality.improvements are essen- more accesil,and less costly inratrutuesertial to modernize and diversify production, help vices are also, of course, essential to more effective - an because important of role it o pervasive play ertunentis leading to a shif from direct govern countries compete internationally, and acoonmuo- poverty reduction. date rapid urbanization. Future success means As in the past, World Deuelopment Report 1994 in-- building on lessons leamned cdudes the World Development Indicators, which The report identifies the basic cause of poor past. offer selected social and economic statistics foDr 132 performance as inadequate inLstitutional incenttives countries. Tfhe Report is a study by the Bank's staff, for improving the provision of infrastructure To pro and the judgments made herein. do'not necessarily mote more efficient and responsive servce delivery, reflect the views of the Board of Directors or of the incentives need to be changed through.commercial governments they irepresent. management, competition, and user involvement. Commercial management-including financial autonomy, accountability, and well-defined -objec-/ C tives-focuses providers of infrastructure services4 w-7 ,j # - on i-ncreasing efficiency andR meeting customer demtandL Competition provides users with choices that Lewis T. Preston car better meet their needs and compels providers President to become more effiient and accountable. Involve- T.he World Bank ment of usi and other stakeholders in the desigi, op- May 31, 1994
-: .- : 7 - A- - .~ g ------ Vry. _ngjobn . .~~~~~- - ting. . ~ ~ _ ,- .~~~~~~~~ weempa ThisR'pprthas bieen prep-ared b yatad b rgr IC Ingramand compisingonBeant-Jone,: f t: ~AnbnioEtacheCItistineKesside'sPeterLanjow 'Ashoka Mody and Lant Pritchett Valuable contri-, tA :iitonsand afdvice-werke:uvdedbysra.Beninathan, Koji]Kashiwaya MgeKiguet Ln Suire.n -aIva4DaCun-Assit- -li team- were Rita. Basu, Leslie Citroen Maian FaChristne X 1avaIlJLas±L~ thout n arried- ibjtSntTewr a tinderthgera lv. - . .~~~h h6Iqe _,-bi - - Many~. othes inside aitdo-utside4e -Bank;provided-helpflcmetan contrflbuti&is (see -the B"o IV a eerna - conomlics :. D)epartm ent contributed to the data appendix and * ~ as#p631spbie ;-Woiirki DvlpetIdicators. The tdconstaff fr h Report -indluded ~~tAai'Bea-Ytthyfli a,Stephane GeraM AuryX elgun athe Kocak, Jfry LeckeIl,Naiqr LvineiD~zch- t urph,~ Hgh ees,Katy Roseni, -Walton Rose-nauistL David $~hdMicu1iia4 The suport saff washeadedby RhodaaBlad e--Chiaret te Rbecca indfiidtita-A]1 Mihael Gellei, anid-Pauil Holtz. Bmuce ROSS-Larson'poie dtra ad~c~nCis~stace~Triida S.Angles s-erved asTadinhnistrative-assistant.Antho'ny Rwly ya ~~ & the~~l Reot wasgratly dddby bacgrud apr adycontributions. frmpar- ~ tiipans c~n~ftat6n eetigs,both of wbichwresuprted' ipAr byr the PolCY and uman Re.- sourts LŽvelomeiatFundfinaced b theJapaese government- The nawmes~ of participaIntsi te.
Page 1 and 2: 3jQi'[~~~~~~~~~~~~~ ~~~~~~~ I -:A -
Page 3: ... ..... Oxford University Prss :O
Page 7 and 8: . 6 Setting priorities and implemen
Page 9 and 10: 3.1. Contractual anrangements for p
Page 11 and 12: Because of changes in GNP per capit
Page 13 and 14: - - Infrastruckure's roleand record
Page 15 and 16: L ~ ~ ~ ~ ~ ... ~ ~ ~ ~ ~ C- l' __
Page 17 and 18: Diagnosing the causes of poor perfo
Page 19 and 20: private sector have evolved. Port f
Page 21 and 22: tradability of infrastructure servi
Page 23 and 24: fits. The way ahead is one of 'cont
Page 25 and 26: Eior - 1 a iX for. - '1~t'*%~ E 6 -
Page 27 and 28: ;~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~W.:-
Page 29 and 30: BoxL12 The importance of infrastruc
Page 31 and 32: and reliability, as well as on quan
Page 33 and 34: Expansion of transport infrastructu
Page 35 and 36: Roads are not private goods, althou
Page 37 and 38: Table 1.3 Expansion of infrastructu
Page 39 and 40: : ~ ~ 2 A :0::~~~~~~~~~~~~~~ 9 0 0
Page 41 and 42: pie of Latin American water utiltie
Page 43 and 44: straint to their mobility (Figure 1
Page 45 and 46: Box 1.7 Infastiucture activities ti
Page 47 and 48: * Option A: Public ownership and op
Page 49 and 50: Lessons of success and failure mana
Page 51 and 52: -~~~~o 22, -Svrac pa eae layoffs tt
Page 53 and 54: vices. These concerns are particula
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Management conitracting wHEN is Ir
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- :. : : . - I- ~~*r~ 4.~ accounts
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The best way of reducing the gap be
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the high rates of return for mainte
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l:: :: . - : 0~ ,aSn- ::~~~i /W-#H
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egional gas distributors, and an en
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5 : zFigre3C4mnbndbgl atvitie ices
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Helped in part by sectoral unbundli
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;t~~1F D ¢- l- e as is demnonstrat
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short-mn gain and skimp on routine
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Table 3.2 Value of infrastructure p
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Box 3.6 Telecom piivatizati6ci the
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Box 3.8 Regulation and privatizatio
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private management can become compl
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this chapter shows, where regulator
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transport ministries in Africa is o
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Unlodking local effort through- dec
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Box 4.3 Power in Purang and roads i
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->W>
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way of achieving distributional obj
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are bundled into low-cost loans to
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powerful minorities can capture the
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to this purpose without sacrificing
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found that although households were
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4 I~~~Z Box46 W canbenefitftbm ibut
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I Box. 4.9 Icroaigenviironmental. c
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. ............ --S - Financigneeded
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Box 5.1 Is there a free lunch?-limi
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Box 52 Tapping international capita
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1~~~~D Clt ,-,.Re -b cope an tie 0
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V Box 5A A successfl-firtt step in
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change risk through the passing on
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Box 5.8 Look before you leap: limit
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poor financial discipline, and subs
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'sv,t-za6oapioceeds (billions of VS
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-~ f4' * ; ylkj XtLSidolkits.(1. -~
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.*,mmr ''', '- ' f - .,__ -, 6.. -.
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Box 6.1 Ingedientr. of good peromne
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government and e strength of the co
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= -ableb 6.Te tspbrhivaof jrnte' sc
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elements of natural monopoly and mu
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solid waste disposal through metrop
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portant that uinstituitional activi
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V-~~~~~~ : ~~~~ :: . = .-s Bibliogr
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on. grwh once more sophisticated ec
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structure and explain the importanc
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1993, Drtze and Stern 1987, Goldste
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Ailken, J., G. Cromwell and C. Wish
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Easterly, William and Sergio ReWo.
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Paul, Samuel. 1991a. -Accomitabilit
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Shirley; Mary and John Nellia 1991.
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*:: Appendix: Infrastr cture data T
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Piual aolai Ekd rkrilytarnyftig' nz
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*TLqdqmrc Main (rsRaiilwad tracks I
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*Teplephmein lines Railnnd tmcts rs
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Acress to safe drIPAIng zmfer Acem
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Table AS3 IBRD and IDA commitments
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* ;;\ * i Contents Key 154 Introduc
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mairking Popzdaliou: hrf htt Total
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.~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~~~I .- In
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into the following broad areas: pro
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: - .~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
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Pqm&uem Airs GN'perafii -AY an!A Uj
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GDP AgmIrflun"y Alatmqjrmd Senrrk.
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Disurihhhiuuefgrmd dmndprSarrf 11 G
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Frnltioirruapm Food pnafaai fndia $
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E-wapro&d-rrm &-VWrvaimdVf Penwifr
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Drnbmdnlnfmafaaummtwdwhirdalf%J 197
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73 Ukraine.. ... 74 Algeria ~~~~~-.
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Gewmt~ ~ Awgsaagsns 1 1970-80 *fl3)
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Aimor GOUANWnk Gniadonmk piomm cama
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D!~~me. MasSe limit ~~mar.w-fftw sf
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Perauagrq JwL node riseiiv swim na
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19M410 1.931-9 Sm 193 199 I93-92 PM
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hfar~uNzr,,~r(udWrnSIAwwunqem-fgmi.
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0hsrpflra Maudhmer& Dinf B21) 1992
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P---rAgetrefurerd.ds&rcpans FiEs. n
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73 Ukruin 339 10.3 33.0 3.2 IDA) 43
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MD3 599 197f 19 197) 199 ami 1992 i
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OECD Net bilatral flows to 1ew4ineo
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~~~~~~~Fcquaa MSraefMIm Par iS&f WV
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TowdrreTaRr -- Inc~~t mz2 ]m im mm
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Dbimnsuzm pulEIMS) RqrsYWwsefpdnr4u
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* ~~~~~~~~~~~~~ToAd njinuc Net FDI
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Wpram agwofamdamrsdddirm S of~~~S.f
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Caiwhssu ~~~An iwqr6atwe A-ragromaB
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Tot 1.iS. 1lj9muksud Awiugnwf-guw*
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Cnd&bin CswkdtmuhArifuve rno fjrIUA
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1970 199 1971 POO0 199 1970 1992 1O
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_ _ __ _ _ _ _ _ _ * A~~~~~~~~ifm a
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Luje'ecam=rurabt @vs A&J a(nionrper
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PPPEJrImE4fGNp Tar Is seon N i Fe I
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M%qainl in. Elm arrarein 1992.. 5 %
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ParTr TdecImUmfaIUkdIS Pawr,! at Wa
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Taunt iFemifirnms Fwstr,srsuahmrd.
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E000 *t Technical notes' The main c
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practical and conceptual difficulti
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ties, and any statistical discrepan
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ily workers, they exdude homeworker
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and bxes not allocable to other cat
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derived from shorter-term stays are
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table, goods and services include w
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aise the isk of infant mortaliyand
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Columns 2 thrugh 7 give the shares
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the ICP Phase IV report, World Comp
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mation explicitly excludes decade-l
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t 1 Classfiction orec"onomuies by i
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Part 2 Clssfcation of economies by
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