Follow us
Publications Commentary Research People Events News Resources and Videos About IFS
Home Publications Can white elephants kill? Unintended consequences of infrastructure development in Peru

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

IFS Working Paper W20/32

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.

More on this topic

IFS Working Paper W22/03
This paper investigates the effect of electronic payments technology on firms’ tax compliance in a large developing economy.
Journal article
We use microsimulation models to study the effects of reduced VAT rates and exemptions on revenues, poverty and inequality. In isolation, reduced VAT rates and exemptions in six LMICs studied are poverty-reducing. They are often expensive in terms of foregone tax revenue, and in all cases richer ...
Journal article | American Economic Journal: Applied Economics
A central issue in designing incentive contracts is the decision to reward agents’ input use versus outputs. The trade-off between risk and return to innovation in production can also lead agents with varying skill levels to perform differentially under different con- tracts. We study this issue ...
Report
Taxes can be used to better align the private costs and benefits of motoring with the social costs and benefits. This report sets out some key issues and policy options for ‘green’ motor taxes in SSA. It provides an overview of the principles of motor taxation, describes the policy context in ...