New UTEP economic report supports infrastructure investment

There is a new University of Texas-El Paso economic report finds investment in infrastructure leads to higher economic growth.

“The belt tightening, ultimately it’s worth it,” said Tom Fullerton, a UTEP Economics professor.

Fullerton and his research team just completed a report they first began in 1996 entitled Physical Infrastructure and Economic Growth in El Paso. The report crunches budget data from 1976 to 2009. What they found is in years following heavy infrastructure investments, economic growth went up.

“How many times have you seen government policies that ultimately fizzle and don’t deliver; that’s not the case with physical infrastructure,” Fullerton said. “And this study confirms what a lot of policy makers have been saying for a long time.”

By physical infrastructure, Fullerton means highways, streets, water and sewer, airport and office buildings. He measured interest and depreciation rates, labor capital and private and public funding in an econometric report only done in regions. But not everything he found was positive: In the short term, growth goes down while the infrastructure is being built.

“But that’s going to be a temporary disruption, once the improvements are in place, it should improve business efficiency, it should improve sales volume,” Fullerton said.

Fullerton said that during strong economic times, when tax money pours in, and when bond projects are passed, there are more jobs, people have more money and the quality of life is higher for everyone.

To get a copy of the study call the UTEP Border Region Modeling Project at (915) 747-7775 or email agwalke@utep.edu.