Why Transport Infrastructure Does Not Necessarily Narrow Regional Economic Disparities

Market Access, Agglomeration, and Local Absorptive Conditions

Abstract

Transport infrastructure lowers spatial frictions and expands market connections, but greater connectivity does not necessarily increase peripheral production or narrow regional income gaps. This article asks under what conditions improved transport access can support sustained peripheral development. It develops an analytical framework through a narrative synthesis of selected theoretical and empirical studies on market access, agglomeration, commuting, and place-based policy. The comparison distinguishes transport modes, geographical scales, and outcome measures rather than pooling heterogeneous estimates. The central argument is that transport improvements expand both peripheral firms’ selling opportunities and core firms’ competitive reach. Their net local effect depends on scale economies, supplier linkages, skills, land costs, and factor mobility. Local output, incumbent residents’ welfare, and interregional disparities therefore require separate evaluation. The framework generates testable propositions concerning pre-existing supplier capacity, firm selection, and commuting-based welfare gains. It also identifies nonrandom route placement, staggered openings, anticipation, and network spillovers as central challenges for causal interpretation. Evidence of local industrial decline can coexist with aggregate gains from lower trade costs; neither outcome alone establishes whether disadvantaged residents benefit. The article contributes an outcome-specific framework for interpreting apparently conflicting evidence and designing evaluations. Policy should identify binding local constraints, distinguish newly created activity from relocation, and assess real household welfare and cross-regional net gains rather than infer success from connectivity or local gross domestic product alone. These propositions remain to be tested with original data.