Impact of Infrastructure on Logistics in the Third World Countries Research Paper

Impact of Infrastructure on Logistics in the Third World Countries - Research Paper Example As the paper declares a number of empirical studies have found that infrastructure has a positive effect on output, especially in developing countries. Returns on infrastructure investments are generally highest during the early stages of development, when infrastructure is scarce and basic networks have not been completed. Returns tend to fall with development, sometimes sharply. This paper will examine closely the effects on logistics caused by infrastructure in the developing world. This discussion stresses that transportation links together the factors of economic production in a complex web of relationships between producers and consumers. The outcome is commonly a more efficient division of production by an exploitation of geographical comparative advantages, as well as the means to develop economies of scale and scope. The productivity of space, capital and labor has been the core problem facing logistics systems in developing countries as a result of in efficiency in distribution and personal mobility. Economic growth is increasingly linked with transport developments, namely infrastructures, but also with managerial expertise, which is crucial for logistics. Although transportation is an infrastructure intensive activity, most of the countries in the Central and East Africa lack hard assets which must be supported by an array of soft assets, namely management and information systems that enhance logistic system.