Year in Review 2016

Abstract

ADB Institute (ADBI) collaborates with the ADB headquarters in Manila on demand-oriented research, and capacity building and training. One of our main interests is infrastructure. Many Asian countries have huge infrastructure needs but insufficient funds. Public–private partnerships are, therefore, important, but many face obstacles because returns on infrastructure are usually low. User charges such as highway tolls or railway fees are a major source of income, but because highways and railways are public goods, governments often regulate their pricing. Water supply and electricity are also public goods and so their price is controlled. It is difficult, therefore, to induce the private sector to invest in them. But a region with good water and electricity supply can attract companies, which would increase employment and land prices, and generate tax revenues with the spillover effects of investment. If tax revenues are partly returned to investors, their rate of return would be greatly increased.