The Reclamation Act and Regional Growth: How Canals Amplified the Impact of USBR Dams in the Arid West

This study examines the long-term effects of United States Bureau of Reclamation (USBR) dams on agricultural productivity and population growth in the Western U.S., with a focus on the role of canals. Using a staggered Difference-in-Differences (DiD) approach, we compare downstream counties with and without canals to upstream counties. Our findings show that USBR dams led to substantial increases in irrigated farmland, the value of agricultural land, population, and crop sales in downstream counties relative to upstream counties. However, the effects were much stronger in downstream counties with canal infrastructure. For example, counties with canals saw greater increases in irrigated farmland, farmland values, and population growth compared to those without canals. In contrast, counties without canals experienced minimal or negative effects. Our robustness checks also confirm that the benefits extend beyond proximity to dams, with the most significant effects observed in counties with canal infrastructure. These results underscore the critical role of complementary infrastructure in shaping the returns to large-scale federal investments in water management, with broader implications for contemporary debates on climate resilience and rural development.