Infrastructure and Development: Evidence from India and East Africa

Lead Research Organisation: London School of Economics and Political Science
Department Name: Economics

Abstract

Abstracts are not currently available in GtR for all funded research. This is normally because the abstract was not required at the time of proposal submission, but may be because it included sensitive information such as personal details.
 
Description The paper "The Value of Democracy: Evidence from Road Building in Kenya", published in 2015, provides credible quantification of the extent of ethnic favoritism, an important threat to development. Ethnic favoritism refers to a situation where coethnics benefit from patronage and public policy decisions, and thus receive a disproportionate share of public resources, when members of their ethnic group control the government. It does so by data on road building in Kenyan districts across the 1963-2011 period. This paper also provides estimates of the extent to which such favouritism is impacted by democratisation. The results indicate strong evidence of ethnic favoritism: districts that share the ethnicity of the president receive twice as much expenditure on roads and have five times the length of paved roads built. Importantly, however, this favoritism disappears during periods of democracy.

The paper "Railroads of the Raj: Estimating the Impact of Transportation Infrastructure", published in 2018, estimates the benefits of transportation infrastructure projects, a key component of development policy, using archival data from colonial India. It finds that railroads decreased trade costs and interregional price gaps, increased interregional and international trade and increased real income levels. Importantly, the paper also finds that the impact of the railroad network on welfare in a district is captured by its impact on one variable: the share of that district's expenditure that it sources from itself.

Finally, the paper "Can Openness Mitigate the Effects of Weather Shocks? Evidence from India's Famine Era", published in 2010, sheds light on the relationship between openness to trade and weather shocks using a colonial era data on Indian districts for the years 1875-1919. This period contained one of the worst strings of famines in recorded history but is also when the railroad network in India was built. Results suggests that the arrival of railroads in Indian districts dramatically constrained the ability of rainfall shocks to cause famines in colonial India.
Exploitation Route The papers provide important lessons regarding the positive impact that transport infrastructure investments can have on growth and development. They also shine a light on how ethnic favouritism can permeate infrastructure policy decisions in the absence of democracy. These findings have key implications for researchers and policymakers in terms of understanding the value of transport infrastructure and encouraging that this be made a priority in development policy.
Sectors Agriculture, Food and Drink,Government, Democracy and Justice,Transport
 
Description Dave Donaldson, author of "Railroads of the Raj: Estimating the Impact of Transportation Infrastructure" and co-author of "Can Openness Mitigate the Effects of Weather Shocks? Evidence from India's Famine Era" was awarded the John Bates Clark Medal of the American Economic Association in 2017 for his path-breaking contributions in international trade. The paper "The Value of Democracy: Evidence from Road Building in Kenya" has appeared on key policy portals such as the IGC (https://www.theigc.org/blog/the-value-of-democracy-in-the-worlds-poorest-region-evidence-from-kenyas-road-building/) and voxeu (https://voxeu.org/article/democracy-inhibits-ethnic-favouritism).
Sector Government, Democracy and Justice,Transport