On a national level, improved transport may increase trade and competition from imports, which in turn may lead to improved production efficiency, putting downward pressure on consumer prices and reducing seasonal fluctuations in price. In urban areas, the price and quality of transportation and other types of infrastructure significantly affect firms' decisions about where to locate and ultimately affect firms' output. In Kinshasa,Zaire, for example,which has expanded fourfold physically since independence, a deteriorating infrastructure forces people living in districts developed after 1960 to walk long distances to reach a bus or their workplace. This affects the productivity of workers and the wages they are likely to demand. Transportation costs are a significant part of total costs, affecting the survival of small firms and the entry of new firms into an industry or market.
National output can increase if inputs shift to more productive uses.
By attracting inputs from other regions, transport can help shift a region's production outward. Project Appraisals Many of the ways in which transport affects an economy are excluded from project appraisal as currently practiced. For example, the severe fiscal constraints developing country governments face make it imperative to identify the fiscal impact of projects and policies, which are considerable yet are usually omitted from project appraisal. Identifying the fiscal impact would require examining the incidence of costs and benefits and determining a shadow price for public funds. To take another example, transport improvements can benefit some groups at the expense of others.