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Investment and Growth: The Impact of B ritain's Post‐War Trunk Roads Programme
Author(s) -
Starkie David
Publication year - 2015
Publication title -
economic affairs
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.24
H-Index - 18
eISSN - 1468-0270
pISSN - 0265-0665
DOI - 10.1111/ecaf.12104
Subject(s) - investment (military) , productivity , labour economics , economics , demographic economics , business , economic growth , politics , political science , law
In G reat B ritain, 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.