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Investing in Infrastructure: Factors Affecting Sector Performance By Sanford V. Berg 1 Public Utility Research Center , University of Florida March 2009 The international financial crisis and global downturn will influence prospects for infrastructure investment, particularly in developing countries where income growth will be significantly affected. Likely policy changes (based on short-term political considerations) result in a riskier environment for investment. Furthermore, citizens will be particularly concerned with price increases in those network sectors that government agencies are supposed to be supervising. Thus, it is a good time to examine the factors that affect infrastructure performance—to assist businesses in fine-tuning their investment strategies and to help political leaders appreciate the importance of providing predictable policy environments if they are not to damage these key sectors—energy, water, telecommunications, and transportation. Therefore, the purpose of this paper is to help investors assess trends in these sectors regardless of the nation under consideration. Assessing long-term commercial prospects requires analysts to characterize the policy environment, including regulatory systems. Given the complexities associated with evaluating past performance and likely developments, investors need to be able to examine key features of a country. Some analysts emphasize the design of regulatory institutions, some focus on the regulatory process (including adherence to announced schedules, transparency, and citizen participa