IMPROVING FREIGHT TRANSPORT EFFICIENCY IN DEVELOPING COUNTRIES: OPERATIONS VERSUS INFRASTRUCTURE

The traditional approach to improving transportation efficiency in developing countries is to invest in roads. The justification is often World Bank models showing large benefits to be derived from improved roads, either new ones or up-graded existing ones. The models are based on the relationship between vehicle operating costs and road characteristics (roughness, curvature, grades). While the two approaches are not necessarily in conflict -- better roads can lead to a more efficient transport system and trucking costs per tonne-kilometer are, in part, a function of the road system -- exclusive concentration on models such as the HDM may focus attention on the wrong issue. It may be that potential gains from operational improvements in developing countries are considerably greater than the rates of return available from massive investments in highways.