Revisiting the Impact of Dams on Malaria and Agriculture

We estimate the effect of large dams on malaria incidence in India between 1975 and 1995. We combine instrumental variables approach with a panel model with unobserved common factors allowing us to fully capture the endogeneity of dam location and unobserved time-varying heterogeneity. Dams result in increased malaria incidence in districts where dams are located and in downstream areas. We find that the construction of a large dam increases a district’s annual malaria incidence by about 0.9 to 1.4 percent, and by about 1 to 1.5 percent in downstream districts. We also find that this malaria-increasing effect of dams persists over time. Our results imply that the construction of dams in malaria-sensitive areas should be coupled with direct interventions, such as the wide deployment of insecticide-treated nets or the roll-out of future vaccines. Furthermore, we examine the contribution of agricultural development to this malaria-increasing effect of dams. We find that dam construction benefits agriculture in the vicinity of dams, as well as in downstream areas. These positive effects are driven by increased irrigation and cultivation in the vicinity of dams, while they are driven by changes in cropping patterns in downstream areas, where the cultivation of high-yielding variety crops increases. Finally, a back-of-the-envelope calculation suggests that the agricultural production gains from dam construction dominate the economic losses resulting from increased malaria.