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Landlocked developing countries are usually among the world’s poorest. The literature analysing the impact of transport costs on development is of long standing, but the specific case of the high transport costs faced by landlocked developing countries has been largely overlooked in both the theoretical and the empirical literature.

This paper:

• reviews the theoretical and empirical literature on the relationship between the condition of being a landlocked developing country and the degree of economic development attained, measured by per capita income
• suggests a new possible reason why landlocked countries may have a low level of development: the greater relative uncertainty to which landlockedness gives rise may have a negative effect on investment incentives in the tradable sector of such countries.
• recommends that development policy for landlocked countries should focus on investment in transport infrastructure and on regional integration.

[adapted from author]

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