In this chapter we focus on regional and economic growth effects of megaprojects. As in the previous chapter, our main purpose is to identify past problems that may prove useful in understanding and improving the decision-making process for such projects.

Recent years have seen a resurgence of interest in the impact of infrastructure on regional development and economic growth. Indeed, one of the arguments often advanced for committing public funds to infrastructure investments is that it will generate economic growth in general, in a region or a country, and/or in a particular local area. There are good theoretical and empirical reasons for approaching such claims with caution, we will argue. A hard-nosed approach to this subject is often warranted since much of the interest in various circles for infrastructure investments reflects rent-seeking behaviour. Such behaviour is explained by the circumstance that infrastructure investments may generate benefits to specific construction and user groups while the major part of costs is often borne by the taxpayers.

Transport infrastructure and economic development

Both business and private persons use transport infrastructure. In general, infrastructure must be seen as an input into the production of a transport service, which in turn is used as an input into a final product or service demanded by consumers, such as a visit to a relative or the availability of a certain commodity in the local store.