Infrastructure Investment and Growth

Decisions on public spending on transportation and communication infrastructure are widespread political dilemmas. In this policy paper, author Lars Hultkrantz gives policy makers some background and recommendations on aspects that should be considered in infrastructure planning, especially when economic growth is a strong political priority.

It is not in doubt that transportation and communication are essential to most economic activities and that there therefore is a close association between infrastructure capacity and economic performance. However, it can be questioned whether infrastructure investment is a lead or a lag variable in relation to economic growth.

The paper consists of four parts:

  1. Introduction to the general dilemma of infrastructure investment and growth
  2. A brief background on the Swedish debate on infrastructure-growth-correlation between 1990–2021
  3. Review of research on whether infrastructure boosts growth
  4. Concluding recommendations for policy makers drawn together based on both research and on the infrastructure planning debate

About the author

Lars Hultkrantz is is Professor Em. of Economics at Örebro University. He is from 2022 editor of the journal Ekonomisk Debatt. His research is about issues in cost-benefit analysis and regulation, mostly in transportation and communication, but also health and natural resources. He is and has been a member of scientific advisory groups of several Swedish government agencies and ministries and was for some time in the board of the National Road Administration.

About the editor

Anna Willman is a Climate Policy Expert at Fores and holds a Master’s degree in Environmental Economics and Climate Change from London School of Economics.

About ELF

The European Liberal Forum (ELF) is the official political foundation of the European Liberal Party, the ALDE Party. Together with 46 member organisations, we work all over Europe to bring new ideas into the political debate, to provide a platform for discussion, and to empower citizens to make their voices heard. ELF was founded in 2007 to strengthen the liberal and democrat movement in Europe. Our work is guided by liberal ideals and a belief in the principle of freedom. We stand for a future-oriented Europe that offers opportunities for every citizen. ELF is engaged on all political levels, from the local to the European. We bring together a diverse network of national foundations, think tanks and other experts. At the same time, we are also close to, but independent from, the ALDE Party and other Liberal actors in Europe. In this role, our forum serves as a space for an open and informed exchange of views between a wide range of different actors.

About Tankesmedjan Fores

Fores – Forum for reforms, entrepreneurship and sustainability – is the green and liberal think tank based in Sweden. With one foot in academia and the other in the public debate, Fores works every day towards solutions and policies that strengthen the liberal democracy. Through our three work groups we seek scientifically based, forward-looking policies on Growth, Security and Trust.