income, due to the presence of significant crowding out. Public works and relief spending also generated a weak multiplier. The wide range of multipliers for infrastructure spending, ranging from 0.4 to 2.2 for the ARRA programs reveal a disagreement among economists about the effects of new spending, but can also be interpreted as the differential impact of different types of investments some with short-run shovel ready impact and others more oriented towards innovation and boosting longer-run growth. The employment effects of ARRA were relatively modest, but nevertheless, transportation funding allowed state and local governments to maintain employment in the transportation construction sector as well as in other sectors.

Despite more limited evidence, the Asian crisis also provides a few lessons. The resulting fiscal austerity regime led to a ‘lost decade’ in infrastructure investments for many Asian countries. In countries such as Indonesia and Korea, where public austerity prevailed, public works programs did lack targeting, and failed to reach the poor who did not participate in the projects (World Bank, 2000 ). Unlike Europe, the few East Asian countries that implement stimulus continued to do so until growth recovered, which led to a stronger recovery. The large and rapid fiscal consolidation in Europe, instead, exerted a strong, negative impact on growth.

# **4. Assessing the Impact of COVID-19 and Recent Infrastructure Programs**

Of course, no crisis is the same. Nevertheless, the COVID-19 recession lands at an ideal time to learn from these past stimulus programs. In fact, comparing historic crises with the economic crises induced by the 2020 COVID-19 global pandemic, there are at first sight some reasons to expect that spending might have smaller multipliers. First, if the uncertainty in the current crisis is deeper than in previous crises, individuals and firms could engage in more precautionary behavior, hoarding cash. Second, if fear of COVID-19 means that people choose not to engage in travel and social activities, efforts to stimulate economic activity will be less effective. Third, it may be difficult to target government injections to where there is a high marginal propensity to spend. Fourth, the impact on expectations may be shaped more by emerging health risks than by financial responses (Stiglitz, 2020). Additionally, employment impacts are very different with construction unemployment rates almost half those of the harder-hit service-sector industries that have been most negatively affected by the pandemic restrictions (US Bureau of Labor Statistics, 2021).

Although, the lessons learned from the literature would point to the higher effectiveness of providing transfers rather than engaging in new investments during such a severe recession as COVID-19. The coexistence of extremely low interest rates provides exactly the monetary policy setting in which investment and spending are known to deliver the highest multipliers. Since the pandemic is still ongoing and there is yet no relevant literature, the purpose of this section is to reflect on what the earlier literature could mean in the current context.

The peculiarity of the COVID-19 crisis also has implications for the prioritization of different types of infrastructure spending as part of any fiscal stimulus. Availability and access to infrastructure in many developing countries have become more urgent amid the threat of COVID-19. The ability to mitigate immediate health risks is often compromised by a lack of access to sanitation and public health infrastructure. In 27 Sub-Saharan African countries, almost 60 percent of health center facilities are without access to electricity (IEA, 2019a), and over 860 million people worldwide lack access to electricity, severely limiting their ability to store medicines and food, charge phones, access digital information, maintain access to education remotely or light their homes effectively (IEA, 2019b). Power outages and blackouts could cost lives and be detrimental to critical medical equipment. Interruption of supply chains for transport service could equally threaten the basic minimal delivery of food, fuel, medical supplies as well as the movement of critical workers that keep the economy functioning.

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