Growing Pains: The Unequal Costs of Infrastructure Modernization

Meera Mahadevan, Ryan McCord, Robyn Meeks and Manisha Pradhananga

No 13093, CESifo Working Paper Series from CESifo

Abstract: When governments modernize infrastructure to a common standard, do households receiving the largest implicit upgrades benefit most? We study a Nepal electricity modernization rollout that installed smart meters and raised connection capacity to enable greater use of electricity. We find that treated households reported more reliable electricity and billed use rose 5 percent on average. However, households receiving the largest upgrades, who had lower expenditures and fewer appliances at baseline, showed no increase in use while their bills rose 19 percent and late payments increased. Households already at the standard increased use without comparable payment strain, benefiting from increased reliability.

Keywords: electric utilities; infrastructure; digitalization (search for similar items in EconPapers)
JEL-codes: L94 P48 Q40 Q56 (search for similar items in EconPapers)
Date: 2026
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