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In The General Theory of Employment
Interest and Money, Keynes argues that in an economy characterized by depression and market failure, high public expenditure is necessary to adjust the economy back to high levels of employment. This implies that high public investment in social and economic infrastructure would increase national income, employment and the welfare of people.
This theory could be of practical importance in developing countries where the bulk of investment in infrastructure is owned and financed by government, and market mechanisms do not function properly. In these countries almost 70 per cent of infrastructure investments are financed by governments or public utilities from their own resources or from non-concessional borrowing, 3 per cent from aid, and the balance from the private sector (DFID 2002).
Microeconomic and Macroeconomic effect
Anderson, Renzio and Levy (2006) maintain that public infrastructure produces two main effects which are microeconomic and macroeconomic in nature. According to these authors, the microeconomic effects of public investment produce two …show more content…
Aigbokan further writes that “public infrastructure does three things:
(1) it provides services that are part of the consumption bundle of residents;
(2) large-scale expenditures for public works increase aggregate demand and provide short-run stimulus to the economy; and
(3) it serves as an input into private sector production, thus augmenting output and productivity. The provision of economic infrastructure can expand the productive capacity of the economy by increasing the quantity and quality of such infrastructure.
The transformation curve or the production possibility frontier or curve would shift with the expansion of the economic infrastructural base, thereby accelerating the rate of economic growth and enhancing the pace of socio-economic development
Social …show more content…
Others are storage warehouses, cribs, open air facilities) (machinery, equipment, building, etc).
We shall focus Specifically on the provision of road infrastructure, medical and health facilities, education, and power (electricity) to show the tremendous effects of social and economic infrastructure on urban rural development in Nigeria.
Effects of road infrastructure on urban/ rural development Transportation plays an important role in the political, economic and social development of any society and whether in rural or urban societies, transportation constitutes the main avenue through which different parts of the society are linked
Interest and Money, Keynes argues that in an economy characterized by depression and market failure, high public expenditure is necessary to adjust the economy back to high levels of employment. This implies that high public investment in social and economic infrastructure would increase national income, employment and the welfare of people.
This theory could be of practical importance in developing countries where the bulk of investment in infrastructure is owned and financed by government, and market mechanisms do not function properly. In these countries almost 70 per cent of infrastructure investments are financed by governments or public utilities from their own resources or from non-concessional borrowing, 3 per cent from aid, and the balance from the private sector (DFID 2002).
Microeconomic and Macroeconomic effect
Anderson, Renzio and Levy (2006) maintain that public infrastructure produces two main effects which are microeconomic and macroeconomic in nature. According to these authors, the microeconomic effects of public investment produce two …show more content…
Aigbokan further writes that “public infrastructure does three things:
(1) it provides services that are part of the consumption bundle of residents;
(2) large-scale expenditures for public works increase aggregate demand and provide short-run stimulus to the economy; and
(3) it serves as an input into private sector production, thus augmenting output and productivity. The provision of economic infrastructure can expand the productive capacity of the economy by increasing the quantity and quality of such infrastructure.
The transformation curve or the production possibility frontier or curve would shift with the expansion of the economic infrastructural base, thereby accelerating the rate of economic growth and enhancing the pace of socio-economic development
Social …show more content…
Others are storage warehouses, cribs, open air facilities) (machinery, equipment, building, etc).
We shall focus Specifically on the provision of road infrastructure, medical and health facilities, education, and power (electricity) to show the tremendous effects of social and economic infrastructure on urban rural development in Nigeria.
Effects of road infrastructure on urban/ rural development Transportation plays an important role in the political, economic and social development of any society and whether in rural or urban societies, transportation constitutes the main avenue through which different parts of the society are linked