Construction and Economic Development of Four Most Competitive Economies in the World: A Comparison

Abstract

In the annual ranking of the world's most competitive economies by the World Economic Forum, the top most competitive countries—Singapore, Finland, Denmark, and Sweden—have ranked consistently well over 10 years. This article examines the role played by construction. The proposition contending that a decline in construction volume follows share in highly developed economies guides the analysis. A possible link between the levels of construction and economic competitiveness is considered. The general conclusion is that the roles and importance of construction in the national economy can vary even among countries belonging to the same economic class. Evidence is presented for three cases: 1) a highly developed country with a mature economy; 2) an urban economy or city-state where urbanisation has led it to successfully attain a developed socio-economic status with construction as one of her engines of growth; and 3) those countries that continuously build and modernize their physical infrastructure as a means of fostering productivity growth and investment.

Keywords:

• advanced industrial countries (AICs)
• construction output
• economic competitiveness
• fiscal policy
• Keynesian economics
• time series statistics

Notes

Source: Data is extracted from WEF, 1996–2006.

Source: United Nations national accounts statistics and relevant websites.

Note. The figures are based on Purchasing Power Parity.