The Wider Economic Benefits of Transport Infrastructure: A Review

Abstract

The standard evaluation of transport infrastructure focuses on transport user benefits. Wider economic benefits (WEBs) are claims for additional economic benefits over and above user benefits. This paper reviews five main forms of WEB: agglomeration economies, the value of additional output in imperfectly competitive markets, labour supply effects, induced commercial and residential developments and overall impacts of transport investment on economies. The paper finds that the wider economic benefits in each case are generally likely to be small or non-existent. Where a claim for a substantial WEB is made, it needs to be supported by a reasoned narrative.