Determinants of quality of land transport infrastructure in developing countries

Abstract

Land transport carries 90 per cent and 80 per cent of passengers and freight, respectively, in developing countries. However, the quality of road (3.3) and rail (2.6) infrastructure in these countries is below the world average (4.07 and 3.61), despite enormous investments, policies, and schemes geared towards the sector. Previous studies focused on determinants of stock and investment in road and rail infrastructure, which may not reflect the quality of road and rail infrastructure on the ground. Therefore, this study investigated the factors that determine the quality of land transport infrastructure in developing countries. The study was rooted in an extended endogenous growth model. Panel data from 106 developing countries spanning the period of 2007–2022 were sourced. The study used Driscoll-Kraaypanel estimation techniques. The results show that gross domestic product per capita, credit to the private sector, debt-to-GDP, urban growth, natural resources, and institutions have a significant impact on the quality of road and rail transport infrastructure. There is evidence that institutions in developing countries are too weak to create an investment climate for quality road and rail to improve. The overall findings show that developing countries need to strengthen their institutions.