Have Collapses in Infrastructure Spending led to Cross-Country Divergence in per Capita GDP?

This paper explores whether the post-1980 decline in infrastructure investment in developing countries is a source of growing disparities in world per capita GDP. I start by reviewing the literature on the infrastructure-productivity link, arguing that a balanced reading of previous studies points to a significant effect of infrastructure provision on productivity. I then empirically study whether retrenchments in infrastructure provision have played a role in growing disparities using a data set of country-level infrastructure stocks for 121 countries since 1960. Cutbacks in infrastructure investment appear to be at most a minor cause of growing divergence in per capita incomes. JEL Classification: H54; O11