GLOBAL: Shrinking Economic Distance

The proposed work will support the Global Flagship Report, Shrinking Economic Distance, which aims to improve policy design on transport connectivity through better understanding of the main transport frictions and their interlinkages, the channels through which policies to alleviate the frictions lead to economic benefits, and the trade-offs that emerge.

The Flagship study is structured around two pillars. Pillar I focuses on the frictions in freight transport that are keeping shippers’ economic costs of transport high and therefore hindering global, regional, and domestic integration. Pillar II focuses on the policies to alleviate the transport frictions and to allow for the reductions in transport costs to ultimately be reflected in faster and more equitable economic development.

The work under pillar I proposed for PPIAF funding will explore the role of PPI in roads and ports in determining the shippers’ economic cost of transport, namely monetary and time costs. The work under pillar II proposed for PPIAF funding will evaluate the spatial economic impacts of recent infrastructure improvements and develop a framework to identify the complementary policies needed to maximize the positive economic impacts and mitigate the adverse distributional implications of transport interventions, particularly of infrastructure investments overall and through PPI specifically.