The dynamics of domestic and international infrastructure investments

This paper investigates the optimal investment policy in local and international infrastructures through a model of dynamic competition
among countries. The framework provided by Martin and Rogers (JIE, 1995) is here extended to include dynamic aspects. The optimal
policy is characterized in two situations: first, when a supranational authority chooses the infrastructure plan and second when the countries do. In the latter, cooperative and non cooperative behaviors are analyzed.