Harvard University and

Abstract: We investigate the long run consequences of infrastructure provision on per capita income in a panel of countries over the period 1950-1992. Simple tests are devised for the existence and sign of the long run impact of infrastructure on income allowing for non-stationarity and cointegration in the time series, and heterogeneity in both the short run and long run responses across countries. We find a great deal of heterogeneity in the results across countries. Our results indicate that telephones and paved roads are provided at the growth maximizing level on a rage, but are under supplied in some countries and over supplied in others. In contrast, we find evidence that electricity generating capacity is under provided on average