Contribution of road transport infrastructure in mitigating the inward–immiserizing growth in Cameroon: An externality approach in computable general equilibrium analysis
The issue of immiserizing growth has been largely discussed in the literature since 1958. It describes a country context contending with high volume of exports relatively to its imports on the international market that benefits from high economic growth but losses in households’ welfare. This study...
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Elsevier
2024-12-01
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| Series: | Sustainable Futures |
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| Online Access: | http://www.sciencedirect.com/science/article/pii/S2666188824001473 |
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| author | Rodrigue Nobosse Tchoffo Claude Matsop Dounya Paul Tadzong Mouafo Severin Sezine Tchio |
| author_facet | Rodrigue Nobosse Tchoffo Claude Matsop Dounya Paul Tadzong Mouafo Severin Sezine Tchio |
| author_sort | Rodrigue Nobosse Tchoffo |
| collection | DOAJ |
| description | The issue of immiserizing growth has been largely discussed in the literature since 1958. It describes a country context contending with high volume of exports relatively to its imports on the international market that benefits from high economic growth but losses in households’ welfare. This study aims to investigate the contribution of transport infrastructure to tackle immiserizing growth in developing countries, focusing on the Cameroon economy, a contending with a significant lack in the development of road transport infrastructure. Further, the study enriches the debate on the wider economic impacts, closely related to immiserizing growth. The loss of welfare is observed upstream to the investigations, as a response to the application of two types of fiscal policies: the import tariff and the capital income tax. Through a dynamic Computable General Equilibrium (CGE) model, the effect of road transport infrastructure is explored, using the externalities approach. This is an innovative methodology recently applied to access the economic impacts of infrastructure investment making a difference between productive and non-productive infrastructure investments. The findings reveal that productive transport infrastructure not only reduces the wider economic impact by improving households’ welfare but also enhances economic growth. A 10 percent increase in road transport infrastructure investment funded by import tariff leads to a welfare improvement of 1.94% and 1.66% in both short and long terms compared to respective losses of 0.58% and 0.15% if the generated financial funds are allocated in non-productive infrastructure such as monuments, defense etc. The similar tendency is observed for the capital income tax funding. Thus, policymakers are recommended to accentuate the road construction, in order to shorten the complex interplay between public decisions and households’ living conditions. |
| format | Article |
| id | doaj-art-69bc25700aa843bdabbd0cf696396171 |
| institution | OA Journals |
| issn | 2666-1888 |
| language | English |
| publishDate | 2024-12-01 |
| publisher | Elsevier |
| record_format | Article |
| series | Sustainable Futures |
| spelling | doaj-art-69bc25700aa843bdabbd0cf6963961712025-08-20T01:57:52ZengElsevierSustainable Futures2666-18882024-12-01810029810.1016/j.sftr.2024.100298Contribution of road transport infrastructure in mitigating the inward–immiserizing growth in Cameroon: An externality approach in computable general equilibrium analysisRodrigue Nobosse Tchoffo0Claude Matsop Dounya1Paul Tadzong Mouafo2Severin Sezine Tchio3PhD in Mathematical Economics, University of Dschang, CameroonPhD in Money, Bank and Finance, Institut Universitaire de la Cote, CameroonPhD in Public Economics, University of Dschang, Cameroon; Corresponding author.PhD in Mathematical Economics, Institut Universitaire de la Cote, CameroonThe issue of immiserizing growth has been largely discussed in the literature since 1958. It describes a country context contending with high volume of exports relatively to its imports on the international market that benefits from high economic growth but losses in households’ welfare. This study aims to investigate the contribution of transport infrastructure to tackle immiserizing growth in developing countries, focusing on the Cameroon economy, a contending with a significant lack in the development of road transport infrastructure. Further, the study enriches the debate on the wider economic impacts, closely related to immiserizing growth. The loss of welfare is observed upstream to the investigations, as a response to the application of two types of fiscal policies: the import tariff and the capital income tax. Through a dynamic Computable General Equilibrium (CGE) model, the effect of road transport infrastructure is explored, using the externalities approach. This is an innovative methodology recently applied to access the economic impacts of infrastructure investment making a difference between productive and non-productive infrastructure investments. The findings reveal that productive transport infrastructure not only reduces the wider economic impact by improving households’ welfare but also enhances economic growth. A 10 percent increase in road transport infrastructure investment funded by import tariff leads to a welfare improvement of 1.94% and 1.66% in both short and long terms compared to respective losses of 0.58% and 0.15% if the generated financial funds are allocated in non-productive infrastructure such as monuments, defense etc. The similar tendency is observed for the capital income tax funding. Thus, policymakers are recommended to accentuate the road construction, in order to shorten the complex interplay between public decisions and households’ living conditions.http://www.sciencedirect.com/science/article/pii/S2666188824001473Transport infrastructureImmiserizing growthEconomic growthWelfareDynamic CGE |
| spellingShingle | Rodrigue Nobosse Tchoffo Claude Matsop Dounya Paul Tadzong Mouafo Severin Sezine Tchio Contribution of road transport infrastructure in mitigating the inward–immiserizing growth in Cameroon: An externality approach in computable general equilibrium analysis Sustainable Futures Transport infrastructure Immiserizing growth Economic growth Welfare Dynamic CGE |
| title | Contribution of road transport infrastructure in mitigating the inward–immiserizing growth in Cameroon: An externality approach in computable general equilibrium analysis |
| title_full | Contribution of road transport infrastructure in mitigating the inward–immiserizing growth in Cameroon: An externality approach in computable general equilibrium analysis |
| title_fullStr | Contribution of road transport infrastructure in mitigating the inward–immiserizing growth in Cameroon: An externality approach in computable general equilibrium analysis |
| title_full_unstemmed | Contribution of road transport infrastructure in mitigating the inward–immiserizing growth in Cameroon: An externality approach in computable general equilibrium analysis |
| title_short | Contribution of road transport infrastructure in mitigating the inward–immiserizing growth in Cameroon: An externality approach in computable general equilibrium analysis |
| title_sort | contribution of road transport infrastructure in mitigating the inward immiserizing growth in cameroon an externality approach in computable general equilibrium analysis |
| topic | Transport infrastructure Immiserizing growth Economic growth Welfare Dynamic CGE |
| url | http://www.sciencedirect.com/science/article/pii/S2666188824001473 |
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