Linking Local Infrastructure Development and Deforestation: Evidence from Satellite and Administrative Data

There is as of yet mixed evidence on the role that local development plays in slowing or hastening environmental degradation in the developing world. We examine a large-scale local infrastructure program in Cambodia over the past two decades. This context involves rapid economic growth and weak (and often extractive) forest governance, a situation ripe for worsening deforestation in response to infrastructure expansion. We identify impacts on satellite-derived forest greenness and cover using village-level variation in the timing of infrastructure investments. We find that irrigation investments improved conditions in nearby forests and that rural road projects did not, on average, worsen forest conditions. These impacts appear to occur through gains in agricultural productivity on already cleared land. Only in the most densely forested regions do road improvements lead to greater forest loss. We conclude that tailored policies supporting local infrastructure can improve both rural livelihoods and forest conditions.