Are Infrastructure Correlations With Economic Growth Actually Causal?

Virtually all of us act as though better broadband has a positive impact on economic growth, in the same way that electricity is correlated with economic growth. Indeed, historically higher energy consumption is correlated with economic growth. 

source: Telecom Advisory Services 

Likewise, it can be argued that transportation also is correlated with higher economic growth. Even there, however, there are questions about whether better transportation creates or merely redistributes economic growth from one place to others. 

The same can be argued for all other forms of infrastructure, physical or social, ranging from water supplies to education and medical care. There almost always is some degree of correlation between higher economic growth and higher inputs of physical or social infrastructure.   

So everyone might agree that broadband quality and economic growth tend to be correlated, though the degree of correlation varies. Burt as with other sorts of infrastructure, it is hard to argue with certainty that any particular infrastructure investment actually “causes” economic growth. 

That is why economics often use phrases such as impact to describe such correlations. So better broadband might be said to drive economic growth. That is another way of saying causal  but less directly. 

Contribution, component or contributor might be other ways economists might describe the relationship between better broadband, transportation, electricity, water systems, education or income and wealth on economic development. 

Correlation is clear. What is unclear is “causation” of any of the inputs.