Infrastructure and economic growth in Peru

This article reviews the literature analysing the importance of infrastructure for economic growth, and performs an econometric estimation to discover the relation between the two variables in the case of Peru. Different estimators are used with panel data from the 24 regions of Peru for the period 1980-2009. The econometric results confirm that public-service infrastructures (roads, electricity and telecommunications) are important in explaining temporary differences in regional output, in keeping with neoclassical exogenous growth theories. Evidence is also found of significant differences in the repercussions of the different infrastructures on per capita gdp in each region. Consequently, the policy authorities should streamline the development of projects that help to reduce the infrastructure disparities that hinder the development of Peru’s regions.