Infrastructure provision and economic growth: evidence from the longest bridge construction in Indonesia

The construction of the Suramadu bridge, the longest bridge in Indonesia connecting the islands of Java and Madura, aimed to stimulate regional economic growth in Madura and reduce disparity. However, 13 years after the construction, significant economic progress in Madura has yet to be seen. This study examines the impact of the bridge construction on the economic growth of Bangkalan, a Madura Island district closest to the bridge from 2010 to 2017. This study employed the synthetic control method (SCM) to construct a synthetic control unit that mimics Bangkalan’s economic growth trajectory in the absence of the Suramadu bridge. The SCM allows for comparison of Bangkalan’s economic growth trajectory with its synthetic control unit post the Suramadu bridge operation. The finding indicates that the Suramadu bridge provision lower the economic growth in Bangkalan. The finding underscores the imperative for careful infrastructure planning to yield optimal returns. Moreover, it advocates for a holistic approach wherein hard infrastructure initiatives are complemented by investments in soft infrastructure, particularly in education and healthcare sectors. Such integrated strategies are essential for realizing the full potential of infrastructure projects in driving sustainable economic growth.This study examines the causal impact of infrastructure provision on regional economic growth in Indonesia. This research question is crucial for many developing countries like Indonesia, where public infrastructure is primarily funded through aid and public debt. The analysis indicates that infrastructure provision has, in fact, led to lower economic growth, challenging many previous studies that identify a positive impact of infrastructure development. This finding underscores the importance of effective infrastructure planning and suggests the necessity of complementary public investments to fully realize the potential benefits of infrastructure provision.