policy can improve not only the quantity, but also the quality, of infrastructure services in developing countries.

As Straub (2008) signals, macro level literature has too often sought to obtain the elasticity of infrastructure capital and compare it with the elasticity of private capital. Few papers go beyond measures of infrastructure spending and infrastructure stocks to consider the issue of infrastructure efficiency. Since the seminal paper of Aschauer (1989) found that infrastructure capital has a large impact on aggregate TFP, this finding has been replicated by a number of earlier studies: Munnell (1990a, 1990b, 1992) for the United States, Mitra et al. (2002) for that of India, and Easterly and Rebelo (1993) for cross-sectional country data. Loayza, Fajnzylber, and Calderón (2002) find that a telecommunications indicator is robustly related to growth in a large panel data set that includes both industrial and developing countries.

For the case of Africa, studies exploring the relation between infrastructure and growth are scarce.<sup>6</sup> Traditionally, infrastructure services have been viewed as public goods in Africa, with their provision entrusted to government monopolies. The overall performance of government-owned providers of infrastructure in Africa has been very poor. This sector is characterized by high inefficiency, a lack of technological dynamism, and very poor service provision. In addition, the provision of infrastructure-related services in most African countries is characterized by high prices and long waits between the time of application for services and actual connection. Many African economies are also endowed with adverse natural and geographical attributes, such as lack of access to sea ports and tropical climates.

The Economic Commission for Africa (ECA) Report (2005) and Sachs et al. (2004) have explored the African need for new investments in infrastructure, but without a properly systematic cross-country analysis. Estache et al. (2005) makes one of the first attempts to conduct a more systematic, quantitative assessment of the importance of Sub-Saharan Africa’s infrastructure. The main finding of this paper is that electricity, water, roads, and telecommunications are crucial factors in promoting growth, with colonial and postcolonial histories also being important factors explaining some of the differences among countries. On the other hand, Esfahani and Ramirez (2003) estimate that Sub-Saharan Africa’s poor growth performance is, in part, related to under-investments in electricity and telecommunications infrastructure. Estache (2005) estimates that if Africa had enjoyed Korea’s quantity and quality of infrastructure, it would have raised its annual growth per capita by about 1 percent. Hulten (1996) finds that differences in the effective use of infrastructure resources explain onequarter of the growth differential between Africa and East Asia, and more than 40 percent of the growth differential between low- and high-growth countries.

Empirical explorations of infrastructure’s effect on growth and productivity, however, have been characterized by ambiguous results with little robustness. The possible endogeneity of infrastructure measures has been advanced as a reason for contradictory findings of the impact of public

> 6 Estache (2005) points out the two main reasons for ignoring the role of infrastructure as one of the most important drivers of economic growth in Africa: (a) econometric focus on human capital, and (b) low quality of available data.

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