Why do infrastructure loans from international banks to developing countries often fail to have their intended effect?

Jobs created by infrastructure projects are temporary.

Businesses need more than infrastructure to thrive.

Private sector growth remains limited.

Infrastructure projects have no impact on social inequality.

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Businesses need more than infrastructure to thrive.

Explanation:

Infrastructure loans obtained by developing countries from international banks do not have the desired results most times because businesses that drive the economy of these countries need more than infrastructure to succeed. When an economy has infrastructure but do not have a trustworthy system free from corruption, there is every possibility that funds will be misappropriated.

Businesses also require more than infrastructure to thrive. In addition, favorable economic policies, a conducive political atmosphere, a fair justice system, etc., must be on ground to support good infrastructure. That way, the obtained funds for infrastructure will have a positive impact.

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