Can white elephants kill? Unintended consequences of infrastructure development in Peru

Antonella Bancalari

No W20/32, IFS Working Papers from Institute for Fiscal Studies

Abstract: It is widely accepted that investing in public infrastructure promotes economic development. However, there is little awareness of the prevalence of unfinished infrastructure projects and their consequences. In this paper, I study the effect of unfinished sewerage infrastructure on early-life mortality in Peru. I compile several sources of administrative panel data for 1,400 districts spanning 2005–2015, and I rely on the budgetary plans and timing of expenditure for 6,000 projects to measure unfinished projects and those completed in a given district. I document that mid-construction abandonment and delays are highly prevalent. I exploit geographical features and partisan alignment to instrument for project implementation. Surprisingly, I find that unfinished sewerage projects increased early-life mortality, driven by lack of water availability, water-borne diseases and accidents. I also show that while unfinished projects pose hazards to the population, completed sewerage projects decrease early-life mortality, in line with public health studies in advanced economies during the previous centuries.

Date: 2020-09-28
New Economics Papers: this item is included in nep-dev, nep-hea, nep-his and nep-ppm
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Citations: View citations in EconPapers (2)

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