The Influence of International Financial Institutions on the Development of the Road Sector in Developing Countries

Abstract

In developing countries, the lack of motorways is one of the constraint development factors. This appears as the high transport costs of the public and private sectors. Therefore, the loans of international financial institutions of development institutions became the common practice along with the traditional tools of investment policy in the road sector. In this study, the operations of five of these institutions in the road sector of developing countries over the last twenty years have been analyzed as well as the reasons and possible consequences of external borrowings. The general trends of investment policy of developing countries in the regional perspective and close relationship between the total extension of the road network and its contribution to development institutions have been demonstrated. The activation of stabilizing actions of banks during post-crisis period has been shown. We have concluded that the length of automobile roads in the countries with low and average level of national income per capita has increased by one third and the availability of the roads is 4 times lower than demographic changes.