initial conditions); the role of infrastructure in creating or closing the gap between poor and rich regions within and across countries, as well among urban and rural areas, etc.

Second, it addresses the issue of composition, sequencing and efficiency of alternative infrastructure investments. This includes aspects such as the arbitrage between new investments and maintenance expenditures, operational expenditure (OPEX) and capital expenditure (CAPEX), public versus private investment, as well as different infrastructure sub-sectors. The objective is to inform the discussion on aspects such as the contribution of different composition of infrastructure investment in terms of growth, the difference in performance of infrastructure industries where a specific sequencing of market based reforms (including privatization regulatory reforms and introduction of competition) has been implemented or, in those infrastructure industries that have remained regulated, what forms of regulation have been most successful, what regulatory mechanisms have yielded superior economic performance, whether those countries and infrastructure sectors that have unbundled and attempted to introduce competition produced greater benefits for these sectors and other sectors of the economy, etc. Note, however, that results on these topics have often not been explicitly integrated in the broader picture of infrastructure development in developing countries, so this paper will mostly highlight gaps and avenues for future research.

Regarding data and empirical work, a few main conclusions emerge. First, the macroeconometric approach, although it has been useful to strengthen the conviction that many aspects of infrastructure do indeed matter for development, has probably reached a limit and the type of policy lessons that practitioners are looking for are unlikely to be provided by such an approach. One area, though, where this type of data can provide additional knowledge is the analysis of how institutional, regulatory and political economy aspects affect the amount and quality of infrastructure services provided. Important efforts both to model the theoretical channels involved and to systematize the corresponding institutional and political data appear necessary.

Following recent development in theory, the area that seems more promising is the economic geography one. Its main strength is the ability to insert micro-level data in a global framework that accounts for the spatial, sectoral and macroeconomic linkages of investments in infrastructure. This literature, however, is still very new in terms of both its theoretical extensions to policy issues, the integration in the models of more realistic infrastructure proxies, and its empirical validation. The main challenges identified in the paper have to do with additional theoretical advances and with the development of the right econometric framework to test dynamic models characterized by threshold effects and multiple equilibria.

At the data level, the systematic development of infrastructure-related micro-level firm and household data is advocated. The objectives are differentiated according to the nature of sectors. For transport data, in particular road and railroad statistics, the paper argues that the aim should be regional (within country) data disaggregated at several levels of road quality / class, of the type already available for some countries such as China. For energy, telecommunications, water and sanitation on the other hand, it argues for the systematic collection of data in household- and firm-level surveys, with a view on upward aggregation to generate village- or district-level 4