DP16139 Complementarities in Infrastructure: Evidence from Rural India

Author(s): Oliver Vanden Eynde, Liam Wren-Lewis
Publication Date: May 2021
Keyword(s): Agriculture, complementarities, infrastructure
JEL(s): O13, O18, Q15
Programme Areas: Public Economics, Development Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=16139

Complementarities between infrastructure projects have been understudied. Our paper examines interactions in the impacts of large-scale road construction, electrification, and mobile phone coverage programs in rural India. We find strong evidence of complementary impacts between roads and electricity on agricultural production: dry season cropping increases significantly when villages receive both, but not when they receive one without the other. These complementarities are associated with a shift of cropping patterns towards market crops and with improved economic conditions. In contrast, we find no consistent evidence of complementarities for the mobile coverage program.