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  • Esther Duflo

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  • Rohini Pande

    ()

Abstract

The construction of large dams is one of the most costly and controversial forms of public infrastructure investment in developing countries, but little is known about their impact. This paper studies the productivity and distributional effects of large dams in India. To account for endogenous placement of dams we use GIS data and the fact that river gradient affects a district's suitability for dams to provide instrumental variable estimates of their impact. We find that, in a district where a dam is built, agricultural production does not increase but poverty does. In contrast, districts located downstream from the dam benefit from increased irrigation and see agricultural production increase and poverty fall. Overall, our estimates suggest that large dam construction in India is a marginally cost-effective investment with significant distributional implications, and has, in aggregate, increased poverty.

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Bibliographic Info

Paper provided by eSocialSciences in its series Working Papers with number id:253.

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Date of creation: Nov 2005
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Handle: RePEc:ess:wpaper:id:253

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Related research

Keywords: Dams; hydropower; irrigation; placement of dams; investment; poverty; impact; downstream; large dams; dam construction; displacement; downstream effect; Economics; Sociology; Environment;

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  1. Abhijit Banerjee & Lakshmi Iyer, 2005. "History, Institutions, and Economic Performance: The Legacy of Colonial Land Tenure Systems in India," American Economic Review, American Economic Association, vol. 95(4), pages 1190-1213, September.
  2. McKinsey, J.W. & Evenson, R., 1999. "Technology-Climate Interactions in the Green Revolution in India," Papers 805, Yale - Economic Growth Center.
  3. Antonio Estache, 1994. "World Development Report: Infrastructure for Development," ULB Institutional Repository 2013/44144, ULB -- Universite Libre de Bruxelles.
  4. Esfahani, Hadi Salehi & Ramirez, Maria Teresa, 2003. "Institutions, infrastructure, and economic growth," Journal of Development Economics, Elsevier, vol. 70(2), pages 443-477, April.
  5. Gramlich, Edward M, 1994. "Infrastructure Investment: A Review Essay," Journal of Economic Literature, American Economic Association, vol. 32(3), pages 1176-96, September.
  6. √Čtienne Gilbert, 1994. "Banque mondiale, World Development Report 1994, Infrastructure for development," Revue Tiers Monde, Programme National Pers√©e, vol. 35(140), pages 939-939.
  7. Jonathan Morduch, 1995. "Income Smoothing and Consumption Smoothing," Journal of Economic Perspectives, American Economic Association, vol. 9(3), pages 103-114, Summer.
  8. Deaton, Angus, 1989. "Rice Prices and Income Distribution in Thailand: A Non-parametric Analysis," Economic Journal, Royal Economic Society, vol. 99(395), pages 1-37, Supplemen.
  9. Petia Topalova, 2005. "Trade Liberalization, Poverty And Inequality: Evidence From Indian Districts," Working Papers id:222, eSocialSciences.
  10. Petia Topalova, 2010. "Factor Immobility and Regional Impacts of Trade Liberalization Evidence on Poverty from India," IMF Working Papers 10/218, International Monetary Fund.
  11. Robert E. Evenson & James W. McKinsey, 1999. "Technology -- Climate Interactions in the Green Revolution in India," Working Papers 805, Economic Growth Center, Yale University.
  12. Abhijit Banerjee & Rohini Somanathan, 2004. "The political economy of public goods: Some evidence from India," Indian Statistical Institute, Planning Unit, New Delhi Discussion Papers 04-17, Indian Statistical Institute, New Delhi, India.
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