8 first made by DFID (2002)<sup>9</sup> and have since been confirmed by World Bank estimates (Briceno and others 2004), but these are all rough estimates simply because needed data are not available.

Most of what is known about the public sector comes from the modest information available in the _International Finance Statistics_ published by the International Monetary Fund (IMF). This source suggests that public spending on infrastructure ranges from 2.1 percent of GDP in upper-middle-income countries to 3.2 percent in low-income countries.<sup>10</sup> Thanks to a research program managed by Easterly and Serven (2003) on Latin America, we have much better data for that region. The authors show that during the 1990s the public sector in the region cut infrastructure spending, reflecting fiscal adjustment programs and unrealized hopes for a major takeover of infrastructure by the private sector. This fiscal adjustment has generally caused a disproportionate drop in public investment, particularly in infrastructure. Very roughly, infrastructure investment levels today average 40–50 percent of what they were 10–15 years ago—and very little of this drop can be explained by more efficient service delivery. In Brazil, for instance, the reduction in public infrastructure investment during the 1990s equaled 174 percent of the fiscal adjustment. The same story holds for low- and lower-middle-income countries: spending levels are well below estimated needs.

Official development assistance (ODA) has traditionally been the second largest source of infrastructure financing. But with the great hope for a large private sector contribution, ODA started to decline in the 1990s. This drop may have contributed to the decline in infrastructure spending (Briceno and others 2004), but it is not clear by how much because there is no database covering all ODA disbursements per sector. In terms of commitments, the 1990s saw a major drop. For instance, infrastructure commitments from multilateral development banks fell from $18.0 billion in 1996 to $13.5 billion in 1999, though by 2002 they had recovered to about $16.0 billion. But even at its peak, such financing was too small relative to needs. At this point the best that can be hoped for is a significant countercyclical effect—with ODA at least sufficient to offset swings in private sector contributions, as well as leverage funds from private sources.

The private sector now provides more infrastructure financing than does ODA, but there are no official statistics to demonstrate this without a doubt. Research conducted at the World Bank has generated some data on the new contribution of the private sector, but this data is imperfect because much of it focuses on commitments rather than disbursements. Knowing that many signed projects are cancelled before they are implemented, the gap between commitments and disbursement is likely to be high—but no one really knows how high simply because there is no data, again except for Latin America thanks to Easterly and Serven (2003). According to a worldwide database, during 1990–2002 private sector commitments to infrastructure in developing countries totaled $805 billion, or $62 billion a year. But this average masks enormous fluctuations. Private commitments rose sharply until 1997, then fell quickly in response to East Asia’s financial crisis. In recent years they have hovered around levels like those in the mid-1990s. For example, in 2002 private commitments totaled $47 billion—the lowest level since 1994. This suggests that private investment accounted for only 10–15 percent of estimated investment needs. In addition, most of these investments have gone to energy and telecommunications (in terms of sectors) and to Latin America, East Asia, and (to a lesser extent) Eastern Europe (in terms of regions).

> 9 U.K. Department for International Development, 2002, “Making Connections: Infrastructure for Poverty Reduction,” London.

> 10 The data are only available for a few countries, and in most cases it is not clear whether it reflects just the central government or all government levels.