The role of infrastructure development in economic growth in Zimbabwe (1981-2008)

Abstract

The current study is aimed at examining the role infrastructure development plays in influencing economic growth in Zimbabwe using time series data from 1981 to 2008. The study also seeks to establish the direction of causality between infrastructure development and economic growth. The study makes use of three infrastructure indicators namely electricity production per capita, telephone mainlines density and energy consumption per capita to capture the effects of infrastructure development on economic growth. The study employed the VAR approach to examine the impact of infrastructure development on economic growth. The study findings revealed that infrastructure development as measured by all three indicators has positive effect on economic growth in the short run. In the long run, the study results were mixed with electricity production and energy consumption indicators having positive effects and telephone mainlines density exhibiting negative effect. The granger causality test revealed that past values of telephone mainlines density and energy consumption have an effect on future economic growth performance, while electricity production does not.