INFRASTRUCTURE INVESTMENTS TO PROMOTE SUSTAINABLE REGIONS



INFRASTRUCTURE INVESTMENTS TO PROMOTE SUSTAINABLE REGIONS

Authors

Jørgen Aarhaug, Institute of Transport Economics, Frants Gundersen, Institute of Transport Economics

Description

This paper focuses on the relation between the size of a region and population developments. We identify critical sizes and discuss the implications for selecting infrastructure investments when the objective is to stimulate sustainable regions.

Abstract

Transport infrastructure is often used as an instrument to reach political objectives. One such objective is to promote robust and sustainable regions. The indicator for a sustainable region is often a region with positive population growth. The implied mechanism is that infrastructure investments enlarge regions so that the labour markets increase in size, and provide a better foundation for attractive industries, leading to more jobs, influx of labour and population growth. Alternatively, and closely related, that improved infrastructure gives regions improved accessibility, and that this allow industry to remain in the region even though distance and uncertainties in transport provide pressure to relocate to regions that are more central.

We base our discussion and findings on quantitative analyses of Norwegian regions using register data on population, industry, commuting and road infrastructure. Also, other characteristics, such as access to services of general interests (SGI), influence on the sustainability of the regions, which will be included in the discussion. We supplement these data with data on commuting from the latest Norwegian travel survey. Our research draws on insights from a project conducted by the authors for the Norwegian National Transport Plan.

The paper concludes by pointing at critical sizes and distances a typical labour market must reach in order to be sustainable in terms of population growth. We also point at the implications this gives for different kind of infrastructure investments. In particular, we discuss the threshold limit from earlier studies, suggesting that regions with more than 10 000 employees achieve positive population development. We also find that the qualitative improvements in the attractiveness of a region, in terms of which services is offered improves markedly more between 5 000 and 10 000 employees compared with any point above 10 000 employees. With regard to infrastructure investments, this suggests that if the objective is to maintain the population in a region or to achieve population growth, it is more important to invest in infrastructure, which increases the size of small regions rather than making mid-sized regions larger. This results in different priorities from those usually reached by using cost benefit analyses. Which typically give higher priority to infrastructure projects in the largest regions.

Publisher

Association for European Transport