Urban Infrastructure

by

Weiping Wu, Deepa Mehta

• LAST REVIEWED: 21 April 2023
• LAST MODIFIED: 15 October 2020
• DOI: 10.1093/obo/9780190922481-0022

Introduction

Infrastructure has an indispensable, positive role in development. There has been much written about the role of urban infrastructure: besides its function of raising the productivity of labor and capital, infrastructure contributes to the welfare of households. Its provision is a lengthy process of financing, construction, and maintenance that involves a multitude of players. With accelerating urbanization, every year developing countries invest hundreds of billions of dollars in new infrastructure, with sizeable portion in transport, power, telecommunications, and water supply and sanitation. For this reason, this entry focuses on these four sectors of urban infrastructure in the context of developing countries and its various regions, while incorporating an understanding of the fundamental role of urban infrastructure for growth and development. To study urban infrastructure in emerging markets and developing economies means grasping the multiple frameworks for infrastructure provision and financing mechanisms, as well as considering the growing arena of private participation in infrastructure. Furthermore, the literature is examining several pressing challenges, such as the infrastructure investment gap and infrastructure capacity gap. Simply, the infrastructure investment gap highlights the financing shortfalls for new infrastructure development and rehabilitation of existing projects. The infrastructure capacity gap primarily recognizes the existing shortages of the necessary infrastructure as well as the institutional shortfalls that limit options for both policymakers and investors. The selected articles demonstrate how these core challenges are addressed through regionally and sector-specific processes of urban infrastructure planning, financing, and service delivery.

General Overviews on the State of Urban Infrastructure

Across developing countries, there is a chronic underinvestment in infrastructure. Public utilities and planning agencies are engaging with the private sector to help bridge the investment, development, and service delivery gaps. Thus, the very institutional arrangements that govern, plan, finance, and develop urban infrastructure projects are undergoing changes. Works discuss how policy and organizational changes give way to new infrastructure practices but also how infrastructure projects are vehicles for rolling out policy goals and can have critical effects on urban lives (the latter discussed in Graham and McFarlane 2014). McDonald, et al. 2014 provides case study evidence to support these ways forward, and more specifically United Nations Human Settlement Program (UN Habitat) 2013 points to an important paradigm shift needed to improve urban transportation infrastructure. Such a shift becomes more urgent as we consider the impact of technologies on urban infrastructure, as imagined by Tierney 2016. In practice, World Bank 1994 argues the public sector inefficiencies are the primary reason for inadequate infrastructure provision and recommends privatization and commercialization in infrastructure. Flyvbjerg 2007 underlines the organizational and governance inefficiencies associated with public infrastructure. Estache 1995 cautions that addressing infrastructure demand through decentralization may not be sufficient. Pieterse and Hyman 2014 underscores that the capacity and investment gaps are more acute for developing countries due to greater amounts of existing infrastructure capital stocks that are crumbling and the higher rates of urbanization that necessitate new infrastructure construction, conditions corroborated by McKinsey Global Institute 2013. Miller 2013 and World Economic Forum 2014 both articulate how investment risks for emerging economies can be lowered by strengthening public-private partnerships and institutional reforms for municipal infrastructure management. Dubash and Morgan 2013 provides regional case studies of the regulatory reform processes associated with infrastructure development in emerging economies.

• Dubash, Navroz K., and Bronwen Morgan, eds. The Rise of the Regulatory State of the South: Infrastructure and Development in Emerging Economies. Oxford: Oxford University Press, 2013.

  This volume chronicles the political economy of regulatory reforms as they relate to infrastructure development in seven Global South countries. It includes chapters on theoretical frameworks to conceptualize the regulatory state in the Global South, literature reviews, national-level case studies, and commentaries. Mainly foregrounds how economic liberalization (in the 1990s and 2000s) has given way to a new class of regulatory reforms and institutional arrangements that allow public, private, and civic interests to partner in new ways and broaden the scope for governance.

• Estache, Antonio, ed. Decentralizing Infrastructure: Advantages and Limitations. World Bank Discussion Papers No. 290. Washington, DC: The World Bank, 1995.

  In this earlier study on the decentralization and privatization of infrastructure, Estache finds that decentralizing public utilities does not unilaterally guarantee quality improvements. By examining the costs, benefits, and trade-offs between decentralized infrastructure and service delivery through the lens of contract theory and the theory of the firm, the volume shows that a positive relationship between decentralization and performance depends on a mix of institutionally and industrially specific factors.

• Flyvbjerg, Bent. “Policy and Planning for Large-Infrastructure Projects: Problems, Causes, Cures.” Environment and Planning. B, Planning & Design 34.4 (2007): 578–597.

  DOI: 10.1068/b32111

  Complex urban infrastructure projects are often plagued by pervasive and sometimes deliberate misinformation about project costs, benefits, and risks due to political and economic factors. In turn, these acts of misinformation lead to the inefficient allocation of resources, service delays, and the destabilization of planning and policy processes. The longitudinal data suggests that this is a persistent, global challenge. Argues for reforming these conventional practices through improved accountability measures.

• Graham, Stephen, and Colin McFarlane, eds. Infrastructure Lives: Urban Infrastructure in Context. 1st ed. London and New York: Routledge, 2014.

  Drawing from experiences in cities from both developing and industrialized countries, the volume covers a range of urban infrastructure including water, sanitation, waste, and even low-carbon infrastructures. It explores what infrastructure means to city dwellers and how it affects their lives.

• McDonald, Robert I., Katherine Weber, Julie Padowski, et al. “Water on an Urban Planet: Urbanization and the Reach of Urban Water Infrastructure.” Global Environmental Change: Human and Policy Dimensions 27 (July 2014): 96–105.

  DOI: 10.1016/j.gloenvcha.2014.04.022

  This global panel study examines the factors that contribute to urban water scarcity, or water stress. The findings reveal urban water infrastructure as a key performance indicator and point to geographical and financial limitations as primary impediments to adequate urban water infrastructure. Argues that the geographical limitations can be addressed through improved collective action and water management processes, while the financial limitations may be addressed through expanded public, private, and multilateral financing as well as multilateral aid.

• McKinsey Global Institute. “Infrastructure Productivity: How to Save $1 Trillion a Year.” McKinsey & Company, 2013.

  This report articulates how fiscal pressures, debt and resource constraints, and the pressing demand for infrastructure development in emerging markets contribute to the growing infrastructure investment gap. The report argues that organizational and institutional innovation in the ways that governments plan, deliver, and operate infrastructure (as well as alternative financing mechanisms and new technologies) are critical factors in meeting the infrastructure investment gap and identifies opportunities for private sector involvement.

• Miller, Jonathan D. “Infrastructure 2013: Global Priorities, Global Insights” Washington, DC: Ernst & Young, LLP & Urban Land Institute, 2013.

  This white paper takes a country-by-country approach to examine urban infrastructure as a critical private sector investment environment. While fiscal constraints faced by governments contribute to the growing infrastructure investment gap and present investment opportunities for private actors, the associated political and regulatory challenges are also perceived as risks by private investors. The report articulates how public-private partnerships, investment mechanisms, and service delivery processes are evolving in order to minimize these challenges and risks in urban infrastructure investment prospects.

• Pieterse, Edgar, and Katherine Hyman. “Disjunctures Between Urban Infrastructure, Finance and Affordability.” In The Routledge Handbook on Cities of the Global South. Edited by Susan Parnell and Sophie Oldfield, 191–205. London: Routledge, 2014.

  The infrastructure investment gap is more acute in developing countries because cities there not only face the challenge of upgrading existing infrastructure failures and shortfalls, but they also require infrastructure investments to build and provide new basic services. This double challenge of the lack of adequate infrastructure availability and affordable financing leave urban areas in the emerging Global South even more vulnerable than their northern counterparts.

• Tierney, T. F. Intelligent Infrastructure: Zip Cars, Invisible Networks, and Urban Transformation. Charlottesville: University of Virginia Press, 2016.

  This edited volume brings together multidisciplinary contributors to imagine and explore how cities may function as interconnected networks of systems, with intelligent and responsive infrastructure enabled by sensors and computing. The key concept of focus in the book is connection, as it is related to the impact of information and communication technologies on urban infrastructure and more specifically mobility systems.

• United Nations Human Settlement Program (UN Habitat). Planning and Design for Sustainable Urban Mobility: Global Report on Human Settlements 2013. New York: Routledge, 2013.

  An important overview of urban transport and associated infrastructure, this report advances accessibility as the guiding objective, to overcome the traditional paradigm of focusing on increasing the length of such infrastructure. Also highlighted is the importance of integrating land use and transportation planning, given the inter-dependence of the two. Such integration can lead to better use of existing transport infrastructure.

• World Bank. World Development Report 1994: Infrastructure for Development. Oxford: Oxford University Press, 1994.

  DOI: 10.1596/978-0-1952-0992-1

  This landmark report establishes the positive relationship between infrastructure and economic growth, poverty alleviation, and environmental sustainability. The report argues that enabling commercialization, competition, and public-private partnerships can provide as resourceful means to address mounting externalities related to poor infrastructure provision through more adequate demand-sensitive infrastructure financing, management, and service delivery.

• World Economic Forum. Infrastructure Investment Policy Blueprint Report 2014.” Geneva: World Economic Forum, 2014.

  This report argues that there is adequate private capital to help narrow the infrastructure investment gap, although political and regulatory environments present uncertainty and other investment risks. Governments can establish more investor-friendly contexts by allowing more investor involvement for infrastructure projects, by designing more supportive policy and regulatory environments, and by recalibrating risk allocation measures that, while ensuring positive returns, are aligned with social and economic goals.