The construction sector in developing countries: Some key issues

Abstract

The construction sector plays a key role in providing public and private infrastructure as well as housing. This chapter surveys the literature on central issues pertaining to the construction sector with a focus on low-income countries. It starts by highlighting distinctive features of goods produced by the construction sector and discusses the link between natural resource discovery or exploitation and the construction sector. It then summarizes our knowledge about differences in unit costs across time and space and how these affect the relationship between investment effort and investment outcomes. The chapter also considers key bottlenecks in the sector related to organization and capabilities, institutional constraints, critical inputs, and governance and corruption. It concludes by discussing policy options related to institutional and regulatory reforms as well as procurement and local content.