The IMF Working Papers series is designed to make IMF staff research available to a wide audience. Almost 300 Working Papers are released each year, covering a wide range of theoretical and analytical topics, including balance of payments, monetary and fiscal issues, global liquidity, and national and international economic developments.
This paper examines the effects of improvements in infrastrucutre on sectoral growth and
firm-level investment, focusing on six Latin American countries. Exploiting the
heterogeneity in the quality of infrastructure across countries and the intrinsic variation in
the dependence of sectors on infrastructure, I find that better infrastructure raises growth
and investment. Improved infrastructure could yield large economic benefits. For
example, if the quality of infrastructure in Colombia increased to the sample median
(Czech Republic), GDP growth would increase by about 0.1 percentage points.