Determinants of Infrastructure and Its Financing Valerie Cerra 1 Alfredo Cuevas 2 Carlos Goes 3 Izabela Karpowicz 4 Troy Matheson 4 Issouf Samake 5 Svetlana Vtyurina 6 Abstract Adequate infrastructure is a critical input for growth and development in all countries, and especially in emerging and developing countries. This article 1 examines the factors that have underpinned the stock of infrastructure across countries, including in Latin America and the Caribbean. We find that public finance and private sector participation both contribute to improving the stock of infrastructure. The impact of public finance depends on how capital investment is financed to meet the government’s budget constraint. Total domestic finance of infrastructure depends, in turn, on domestic financial depth and links to the rest of the world through trade and foreign investment. Keywords Infrastructure, public investment, investment financing, Latin America and the Caribbean Article Emerging Economy Studies 3(2) 1–14 © 2017 International Management Institute SAGE Publications sagepub.in/home.nav DOI: 10.1177/2394901517730739 http://emi.sagepub.com 1 Institute for Capacity Development, International Monetary Fund, Washington DC, USA. 2 European Department, International Monetary Fund, Washington DC, USA. 3 Special Secretariat for Strategic Affairs, Offce of the President of Brazil, Brasilia, Brazil. 4 Western Hemisphere Department, International Monetary Fund, Washington DC, USA. 5 Middle East & Central Asia Department, International Monetary Fund, Washington DC, USA. 6 European Department, International Monetary Fund, Washington DC, USA. Corresponding author: Valerie Cerra. Institute for Capacity Development, International Monetary Fund, Washington DC, USA. E-mail: vcerra@imf.org