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Dams

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  • Esther Duflo
  • 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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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 11711.

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Date of creation: Oct 2005
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Publication status: published as Esther Duflo & Rohini Pande, 2007. "Dams," The Quarterly Journal of Economics, MIT Press, vol. 122(2), pages 601-646, 05.
Handle: RePEc:nbr:nberwo:11711

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  1. Abhijit Banerjee & Lakshmi Iyer, 2010. "History Institutions and Economic Performance: The Legacy of Colonial Land Tenure Systems in India," Working Papers id:2811, eSocialSciences.
  2. Petia Topalova, 2005. "Trade Liberalization, Poverty And Inequality: Evidence From Indian Districts," Working Papers id:222, eSocialSciences.
  3. Morduch, J., 1995. "Income Smoothing and Consumption Smoothing," Papers, Harvard - Institute for International Development 512, Harvard - Institute for International Development.
  4. McKinsey, J.W. & Evenson, R., 1999. "Technology-Climate Interactions in the Green Revolution in India," Papers, Yale - Economic Growth Center 805, Yale - Economic Growth Center.
  5. Banerjee, Abhijit & Somanathan, Rohini, 2007. "The political economy of public goods: Some evidence from India," Journal of Development Economics, Elsevier, Elsevier, vol. 82(2), pages 287-314, March.
  6. Petia Topalova, 2010. "Factor Immobility and Regional Impacts of Trade Liberalization: Evidence on Poverty from India," American Economic Journal: Applied Economics, American Economic Association, American Economic Association, vol. 2(4), pages 1-41, October.
  7. Robert E. Evenson & James W. McKinsey, 1999. "Technology -- Climate Interactions in the Green Revolution in India," Working Papers, Economic Growth Center, Yale University 805, Economic Growth Center, Yale University.
  8. Esfahani, Hadi Salehi & Ramirez, Maria Teresa, 2003. "Institutions, infrastructure, and economic growth," Journal of Development Economics, Elsevier, Elsevier, vol. 70(2), pages 443-477, April.
  9. Antonio Estache, 1994. "World Development Report: Infrastructure for Development," ULB Institutional Repository 2013/44144, ULB -- Universite Libre de Bruxelles.
  10. Étienne Gilbert, 1994. "Banque mondiale, World Development Report 1994, Infrastructure for development," Revue Tiers Monde, Programme National Persée, Programme National Persée, vol. 35(140), pages 939-939.
  11. Gramlich, Edward M, 1994. "Infrastructure Investment: A Review Essay," Journal of Economic Literature, American Economic Association, vol. 32(3), pages 1176-96, September.
  12. Deaton, Angus, 1989. "Rice Prices and Income Distribution in Thailand: A Non-parametric Analysis," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 99(395), pages 1-37, Supplemen.
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