The infrastructure paradox in Ecuador : public investment and the persistence of territorial disparities in cantons with low initial development

This paper examines the effects of public infrastructure spending across Ecuadorian cantons on adequate employment and the multidimensional poverty rate over the period 2008-2022, assessing whether such spending operated as a mechanism of convergence. The analysis is grounded in the hypothesis that infrastructure investment yields stronger effects in cantons characterized by lower initial levels of development. The coefficient of primary interest, associated with the interaction between low initial development and infrastructure expenditure, takes a value of -0.9542, which theoretically indicates a substantially larger impact on outcome variables in lagging cantons. This pattern is consistent with convergence theory and with the notion of investment spillovers, often described as a trickle-down process of development. Nevertheless, the estimated effect is marginally significant at the 10% level. In light of these results, the discussion revisits the convergence hypothesis by emphasizing the role of endogenous and institutional factors in shaping inclusive development across Ecuadorian cantons. The discussion underscores the importance of public expenditure quality in Latin America (LATAM) as a critical factor impacting the region's economic growth, social equity, and overall development.