Research project objectives/ Research hypothesis
One of the most important tools of regional policy, and European Cohesion Policy implemented in Poland since 2004 in particular, is accomplishment of big infrastructure projects. As a result, between 2004 and 2015 there were to be implemented over 130 projects with budget over euro 100 each. Yet, existing studies focused on infrastructure investment do not unambiguously prove the positive correlation between big infrastructure projects and regional development. Moreover, the experience of other countries show that the implementation of big projects usually leads to many problems and ends up with ineffective spending of public funds.
Therefore, the main goal of the project is to investigate empirically the impact of big infrastructure projects on regional development. We also want to verify whether the amount of financial means devoted to the big projects is adequate as compared to the real costs associated with their accomplishment.
The project will verify following research hypotheses:
- Infrastructure investment is positively correlated with long run economic growth rate. Moreover, it is possible to clearly show the causal relationship here.
- The accomplishment of big infrastructure projects can speed up economic growth in particular region to a certain extent only. Moreover, the impact of big infrastructure projects depends on their characteristics (e.g. transport versus environment protection).
- Actuarial credibility method, used mainly in the insurance sector, can be successfully applied in order to improve financial planning of big infrastructure projects.
- Big infrastructure projects may have relatively smaller impact on regional development than project with local scope (e.g. highways versus local roads).
Research project methodology
We plan to apply a number of different methodological approaches. It includes:
- Regional dynamic CGE model that is an adaptation of the TERM model. This model will be used in the analysis of the macroeconomic effects of big infrastructural projects;
- Econometric modeling that will include spatial econometric tools. The above tools will be applied in the analysis of the impact of big infrastructural projects on regional economic development in the micro and macro scale;
- Actuarial credibility method that will allow to verify the adequateness of the amount of financial means spent on big infrastructure projects.
Expected impact of the project on the development of science, civilization and socjety
Proposed project should significantly improve the knowledge concerning the impact of infrastructure investment on economic development, and big infrastructure projects in particular. Hence, we will be able to verify the results of existing theoretical and empirical studies. In particular, we want to answer the question concerning causality between infrastructure investment and economic growth. In this sense, the key is to base our analysis on Polish data since most of infrastructure investment has been financed by the European Union. Within the proposed project we will also verify the possibility of applying actuarial methods in order to improve financial planning of big infrastructure projects.
The results of the project should substantially improve the effectiveness of public policies, in particular the ones focused on big infrastructure projects. We expect to prepare at least four papers that will be submitted for publication. We plan to submit one paper to Polish journal (e.g. Ekonomista, Gospodarka Narodowa) and at least three to renowned international journals. We aim at publishing at least one paper in a leading American journal (e.g. Journal of Regional Science, The Review of Economics and Statistics, Regional Science and Urban Economics). Still, the project results could be also used to develop a multidimensional model of assessment of the big projects. In this sense the results of the research could be applied in the economic policy, and infrastructure policy in particular.