The Heterogeneous Effects of Transportation Investments: Evidence from sub-Saharan Africa 1960-2010

July 20 2016

Previous work on the effects of transportation investments has focused on estimating average impacts in middle and high income countries. Less is known about the heterogeneity of the impact of these investments, depending on the context in which they take place. We shed light on this by studying how the effects of transportation investments vary as a function of the characteristics of the places they connect. Using new data on roads and cities spanning over 50 years in 39 African countries, we document the effect of road construction on city population growth, through the channel of increasing market access. First, using changes in market access due to distant road construction as a source of exogenous variation in market access, we estimate a 30-year elasticity of city population with respect to market access of 0.05 to 0.20, larger than an OLS estimate of 0.035, but smaller than estimates for other contexts. Second, relying on the same identification strategy, we find suggestive evidence that it is stronger for small and remote cities, and cities that experience a large change in their market access, especially to other cities of the same country or international ports, and weaker for cities in areas with a comparative advantage in agriculture and areas most likely to be favored by ethnic patronage. The observed heterogeneity in the effects confirms the importance of understanding local context when evaluating the impact of transport investment.

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Remi Jedwab

Adam Storeygard is an Assistant Professor of Economics at Tufts University specializing in urban and development economics.