Investment and Growth: The Impact of Britain's Post‐War Trunk Roads Programme

15 Pages Posted: 7 Feb 2015

Date Written: February 2015

Abstract

In Great Britain, a basic inter‐urban network of motorways was completed in a very short period between the end of 1959 and 1972. We calculate that this substantial investment had the potential to reduce most inter‐urban journey times by about one third. In spite of this, a recent OECD study suggested that the investment had no discernible positive impact on the trend rate of economic growth. We attribute this outcome to a serious misalignment of the early investments with the then predominant flows of industrial and commercial traffics and a significant, and probably endogenous, increase in real wages in a road transport industry in which labour productivity was slow to improve. We conclude with a number of policy recommendations.

Keywords: economic growth, investment projects, motorways, road transport

JEL Classification: H54, L91, L92, N74, R41, R42

Suggested Citation

Starkie, David Nicholas, Investment and Growth: The Impact of Britain's Post‐War Trunk Roads Programme (February 2015). Economic Affairs, Vol. 35, Issue 1, pp. 60-74, 2015, Available at SSRN: https://ssrn.com/abstract=2561647 or http://dx.doi.org/10.1111/ecaf.12104

David Nicholas Starkie (Contact Author)

Case Associates ( email )

1 Heddon Street
London, W1B4BD
United Kingdom

HOME PAGE: http://www.casecon.com

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