Towards Greater Effectiveness of Infrastructure Policies

Reversing the infrastructure lag in the region requires State intervention through the adoption of new public policies and increased investment. One of the main challenges is to improve co-ordination and coherence among relevant stakeholders in the area of infrastructure. Co-ordination is particularly necessary among agencies at the same level of government, agencies of different government levels, and among public and private stakeholders. For example, better use of existing transport infrastructure would lower the costs of deploying broadband networks. In terms of agencies, better co-ordination of multimodal transport policy should take into account the noticeable differences in external costs of the different modes of transport. Increased effectiveness of the infrastructure policy cycle permits countries to achieve higher levels of development. In order to identify the bottlenecks that limit the effectiveness of infrastructure policies, it is necessary to evaluate and strengthen the different phases of policy making: prioritising and planning, execution, operation and maintenance. To do this, it is necessary to build a regulatory framework that includes a system of checks and balances and clearly defines transparency and accountability mechanisms. 

In the transport sector, the prioritising and planning phase should aim to increase the social benefits from public works through a social evaluation process. Finding a balance between commencing new projects and maintaining existing infrastructure is key to this. 

In the telecommunications sector, it is necessary to adapt the regulatory framework to an environment of technological convergence. Regulations should aim to improve the management of state-owned resources such as the electromagnetic spectrum and fibre-optic networks through fixing rates and requiring open access. 

The State must apply a strategic vision to private participation in infrastructure, seeking the most suitable partnerships and instruments available to improve the quality of services and goods provided. Adequate project planning and design would indicate when private participation is desirable, without risk transfer being the only criterion. This should be encouraged in an environment that minimises perverse incentives for rent seeking, solves the problems of dynamic inconsistency, mitigates information problems and maximises efficiency and quality in the provision of services. In the transport sector it is important to follow a strict selection process for private participation (such as “value for money” analysis) and to have well-designed contracts and a fiscal accounting system that does not favour concessions over public projects. This would minimise concession renegotiations, which would considerably reduce hidden fiscal costs. 

In the telecommunications sector, especially broadband Internet, it is necessary to set up mechanisms and incentives that foster development of infrastructure where the provision of service is not profitable for the private sector, with the priority being open access to the network. 

The institutional framework and civil-service careers in the transport and telecommunications sectors require important reforms. It is necessary to follow hiring schemes that encourage professionalisation, specialisation, and the development of a civil service that is independent from the political cycle and is capable of using sophisticated tools for planning, evaluation and monitoring.37 Both regulatory bodies and agencies responsible for contracting services and infrastructure must have greater autonomy to ensure better co-ordination among stakeholders.