IDEAS home Printed from https://ideas.repec.org/p/cpr/ceprdp/8427.html
   My bibliography  Save this paper

Development Effects of Electrification: Evidence from the Geologic Placement of Hydropower Plants in Brazil

Author

Listed:
  • Mobarak, Ahmed
  • Lipscomb, Molly
  • Barham, Tania

Abstract

We estimate the development effects of electrification across Brazil over the period 1960-2000. Brazil relies almost exclusively on hydropower, which requires intercepting water at high velocity. We build an engineering model which takes as inputs only geography (river gradient, water flow and Amazon) and simulates a time series of hypothetical electricity grids for Brazil that show how the grid would have evolved had infrastructure investments been made based solely on geologic cost considerations, ignoring all demand-side concerns. Using the model as an instrument, we document large positive effects of electrification on development that are underestimated when one fails to account for the political allocation of infrastructure projects or its targeting to under-developed areas. Broad-based improvement in labor productivity across sectors and areas rather than general equilibrium re-sorting (in-migration to electrified counties) appears to be the likely mechanism by which these development gains are realized.

Suggested Citation

  • Mobarak, Ahmed & Lipscomb, Molly & Barham, Tania, 2011. "Development Effects of Electrification: Evidence from the Geologic Placement of Hydropower Plants in Brazil," CEPR Discussion Papers 8427, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:8427
    as

    Download full text from publisher

    File URL: https://cepr.org/publications/DP8427
    Download Restriction: CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Aschauer, David Alan, 1989. "Is public expenditure productive?," Journal of Monetary Economics, Elsevier, vol. 23(2), pages 177-200, March.
    2. Gramlich, Edward M, 1994. "Infrastructure Investment: A Review Essay," Journal of Economic Literature, American Economic Association, vol. 32(3), pages 1176-1196, September.
    3. Taryn Dinkelman, 2011. "The Effects of Rural Electrification on Employment: New Evidence from South Africa," American Economic Review, American Economic Association, vol. 101(7), pages 3078-3108, December.
    4. Wolfram Schlenker & W. Michael Hanemann & Anthony C. Fisher, 2006. "The Impact of Global Warming on U.S. Agriculture: An Econometric Analysis of Optimal Growing Conditions," The Review of Economics and Statistics, MIT Press, vol. 88(1), pages 113-125, February.
    5. Wolfgang Keller & Carol H. Shiue, 2008. "Institutions, Technology, and Trade," NBER Working Papers 13913, National Bureau of Economic Research, Inc.
    6. Fan, Shenggen & Zhang, Linxiu & Zhang, Xiaobo, 2002. "Growth, inequality, and poverty in rural China: the role of public investments," Research reports 125, International Food Policy Research Institute (IFPRI).
    7. Jeremy Atack & Fred Bateman & Michael Haines & Robert A. Margo, 2009. "Did Railroads Induce or Follow Economic Growth? Urbanization and Population Growth in the American Midwest, 1850-60," NBER Working Papers 14640, National Bureau of Economic Research, Inc.
    8. Cadot, Olivier & Roller, Lars-Hendrik & Stephan, Andreas, 2006. "Contribution to productivity or pork barrel? The two faces of infrastructure investment," Journal of Public Economics, Elsevier, vol. 90(6-7), pages 1133-1153, August.
    9. María Teresa Ramírez & Hadi Salehi Esfahani, 1999. "Infrastructure and Economic Growth," Borradores de Economia 123, Banco de la Republica de Colombia.
    10. Banerjee, Abhijit & Duflo, Esther & Qian, Nancy, 2020. "On the road: Access to transportation infrastructure and economic growth in China," Journal of Development Economics, Elsevier, vol. 145(C).
    11. Chandra, Amitabh & Thompson, Eric, 2000. "Does public infrastructure affect economic activity?: Evidence from the rural interstate highway system," Regional Science and Urban Economics, Elsevier, vol. 30(4), pages 457-490, July.
    12. Michael Greenstone & Justin Gallagher, 2008. "Does Hazardous Waste Matter? Evidence from the Housing Market and the Superfund Program," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 123(3), pages 951-1003.
    13. Antonio Estache, 2010. "A survey of impact evaluations of infrastructure projects, programs and policies," Working Papers ECARES 2010_005, ULB -- Universite Libre de Bruxelles.
    14. Joshua Angrist & Eric Bettinger & Erik Bloom & Elizabeth King & Michael Kremer, 2002. "Vouchers for Private Schooling in Colombia: Evidence from a Randomized Natural Experiment," American Economic Review, American Economic Association, vol. 92(5), pages 1535-1558, December.
    15. Parker, Susan W. & Rubalcava, Luis & Teruel, Graciela, 2008. "Evaluating Conditional Schooling and Health Programs," Handbook of Development Economics, in: T. Paul Schultz & John A. Strauss (ed.), Handbook of Development Economics, edition 1, volume 4, chapter 62, pages 3963-4035, Elsevier.
    16. International Monetary Fund, 2002. "Moreon the Effectiveness of Public Spendingon Health Care and Education: A Covariance Structure Model," IMF Working Papers 2002/090, International Monetary Fund.
    17. Javier Escobal & Máximo Torero, 2005. "Measuring the Impact of Asset Complementarities: The Case of Rural Peru," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 42(125), pages 137-164.
    18. Ketlogetswe, C. & Mothudi, T.H. & Mothibi, J., 2007. "Effectiveness of Botswana's policy on rural electrification," Energy Policy, Elsevier, vol. 35(2), pages 1330-1337, February.
    19. Canning, David & Bennathan, Esra, 2000. "The social rate of return on infrastructure investments," Policy Research Working Paper Series 2390, The World Bank.
    20. Ahmed Mushfiq Mobarak & Andrew Sunil Rajkumar & Maureen Cropper, 2011. "The Political Economy of Health Services Provision in Brazil," Economic Development and Cultural Change, University of Chicago Press, vol. 59(4), pages 723-751.
    21. Michael Kremer, 2003. "Randomized Evaluations of Educational Programs in Developing Countries: Some Lessons," American Economic Review, American Economic Association, vol. 93(2), pages 102-106, May.
    22. Edward Miguel & Michael Kremer, 2004. "Worms: Identifying Impacts on Education and Health in the Presence of Treatment Externalities," Econometrica, Econometric Society, vol. 72(1), pages 159-217, January.
    23. Glewwe, Paul & Miguel, Edward A., 2008. "The Impact of Child Health and Nutrition on Education in Less Developed Countries," Handbook of Development Economics, in: T. Paul Schultz & John A. Strauss (ed.), Handbook of Development Economics, edition 1, volume 4, chapter 56, pages 3561-3606, Elsevier.
    24. Paul Glewwe & Michael Kremer & Sylvie Moulin, 1998. "Textbooks and test scores: Evidence from a prospective evaluation in kenya," Natural Field Experiments 00255, The Field Experiments Website.
    25. Paul Schultz, T., 2004. "School subsidies for the poor: evaluating the Mexican Progresa poverty program," Journal of Development Economics, Elsevier, vol. 74(1), pages 199-250, June.
    26. Barnes,Douglas French & Khandker,Shahidur R. & Nguyen,Minh Huu & Samad,Hussain A., 2009. "Welfare impacts of rural electrification : evidence from Vietnam," Policy Research Working Paper Series 5057, The World Bank.
    27. repec:feb:natura:0004 is not listed on IDEAS
    28. Lucas W. Davis, 2004. "The Effect of Health Risk on Housing Values: Evidence from a Cancer Cluster," American Economic Review, American Economic Association, vol. 94(5), pages 1693-1704, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Catherine Wolfram & Orie Shelef & Paul Gertler, 2012. "How Will Energy Demand Develop in the Developing World?," Journal of Economic Perspectives, American Economic Association, vol. 26(1), pages 119-138, Winter.
    2. Fisher-Vanden, Karen & Mansur, Erin T. & Wang, Qiong (Juliana), 2015. "Electricity shortages and firm productivity: Evidence from China's industrial firms," Journal of Development Economics, Elsevier, vol. 114(C), pages 172-188.
    3. Eliana Carranza & Robyn Meeks, 2021. "Energy Efficiency and Electricity Reliability," The Review of Economics and Statistics, MIT Press, vol. 103(3), pages 461-475, July.
    4. Paul J. Gertler & Orie Shelef & Catherine D. Wolfram & Alan Fuchs, 2016. "The Demand for Energy-Using Assets among the World's Rising Middle Classes," American Economic Review, American Economic Association, vol. 106(6), pages 1366-1401, June.
    5. Borge, Lars-Erik & Parmer, Pernille & Torvik, Ragnar, 2015. "Local natural resource curse?," Journal of Public Economics, Elsevier, vol. 131(C), pages 101-114.
    6. Alby, Philippe & Dethier, Jean-Jacques & Straub, Stéphane, 2011. "Let there be Light! Firms Operating under Electricity Constraints in Developing Countries," IDEI Working Papers 686, Institut d'Économie Industrielle (IDEI), Toulouse.
    7. Chakravorty, Ujjayant & Pelli, Martino & Ural Marchand, Beyza, 2014. "Does the quality of electricity matter? Evidence from rural India," Journal of Economic Behavior & Organization, Elsevier, vol. 107(PA), pages 228-247.
    8. Gray, Rowena, 2013. "Taking technology to task: The skill content of technological change in early twentieth century United States," Explorations in Economic History, Elsevier, vol. 50(3), pages 351-367.
    9. Daniela López Cajiao, 2018. "Lightning the future of education in Brazil: the impact of rural electrification on educational outcomes," Documentos CEDE 16817, Universidad de los Andes, Facultad de Economía, CEDE.
    10. Paul Gertler & Orie Shelef & Catherine Wolfram & Alan Fuchs, 2013. "How Pro-Poor Growth Affects the Demand for Energy," NBER Working Papers 19092, National Bureau of Economic Research, Inc.
    11. repec:bny:wpaper:0014 is not listed on IDEAS
    12. van de Walle, Dominique & Ravallion, Martin & Mendiratta, Vibhuti & Koolwal, Gayatri, 2013. "Long-term impacts of household electrification in rural India," Policy Research Working Paper Series 6527, The World Bank.
    13. Alan Fuchs & Paul Gertler & Orie Shelef & Catherine Wolfram, 2013. "Poverty, Growth and the Demand for Energy-Using Assets," Discussion Papers 13-004, Stanford Institute for Economic Policy Research.
    14. Grogan, Louise & Sadanand, Asha, 2013. "Rural Electrification and Employment in Poor Countries: Evidence from Nicaragua," World Development, Elsevier, vol. 43(C), pages 252-265.
    15. Kumar, Santosh & Rauniyar, Ganesh, 2011. "Is electrification welfare improving?: non-experimental evidence from rural Bhutan," MPRA Paper 31482, University Library of Munich, Germany.
    16. Carl Kitchens & Price Fishback, 2013. "Flip the Switch: The Spatial Impact of the Rural Electrification Administration 1935-1940," NBER Working Papers 19743, National Bureau of Economic Research, Inc.
    17. Alby, Philippe & Dethier, Jean-Jacques & Straub, Stephane, 2010. "Firms operating under infrastructure and credit constraints in developing countries : the case of power generators," Policy Research Working Paper Series 5497, The World Bank.
    18. Jagnani, Maulik & Khanna, Gaurav, 2020. "The effects of elite public colleges on primary and secondary schooling markets in India," Journal of Development Economics, Elsevier, vol. 146(C).
    19. Rao, Narasimha D., 2013. "Does (better) electricity supply increase household enterprise income in India?," Energy Policy, Elsevier, vol. 57(C), pages 532-541.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Molly Lipscomb & A. Mushfiq Mobarak & Tania Barham, 2013. "Development Effects of Electrification: Evidence from the Topographic Placement of Hydropower Plants in Brazil," American Economic Journal: Applied Economics, American Economic Association, vol. 5(2), pages 200-231, April.
    2. Duflo, Esther & Glennerster, Rachel & Kremer, Michael, 2008. "Using Randomization in Development Economics Research: A Toolkit," Handbook of Development Economics, in: T. Paul Schultz & John A. Strauss (ed.), Handbook of Development Economics, edition 1, volume 4, chapter 61, pages 3895-3962, Elsevier.
    3. Yasuyuki Sawada, 2015. "The Impacts of Infrastructure in Development: A Selective Survey," Working Papers id:6482, eSocialSciences.
    4. David K. Evans & Arkadipta Ghosh, 2008. "Prioritizing Educational Investments in Children in the Developing World," Working Papers WR-587, RAND Corporation.
    5. Ward Romp & Jakob De Haan, 2007. "Public Capital and Economic Growth: A Critical Survey," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 8(S1), pages 6-52, April.
    6. Manfred Wiebelt & Rainer Schweickert & Clemens Breisinger & Marcus Böhme, 2011. "Oil revenues for public investment in Africa: targeting urban or rural areas?," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 147(4), pages 745-770, November.
    7. Mejia, Daniel & St-Pierre, Marc, 2008. "Unequal opportunities and human capital formation," Journal of Development Economics, Elsevier, vol. 86(2), pages 395-413, June.
    8. David K. Evans & Arkadipta Ghosh, 2008. "Prioritizing Educational Investments in Children in the Developing World," Working Papers 587, RAND Corporation.
    9. Afeikhena Jerome, 2011. "Infrastructure, Economic Growth and Poverty Reduction in Africa," Journal of Infrastructure Development, India Development Foundation, vol. 3(2), pages 127-151, December.
    10. Atif Ansar & Bent Flyvbjerg & Alexander Budzier & Daniel Lunn, 2016. "Does infrastructure investment lead to economic growth or economic fragility? Evidence from China," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 32(3), pages 360-390.
    11. Berger, Thor & Enflo, Kerstin, 2017. "Locomotives of local growth: The short- and long-term impact of railroads in Sweden," Journal of Urban Economics, Elsevier, vol. 98(C), pages 124-138.
    12. Martina Björkman, 2007. "Does Money Matter for Student Performance? Evidence from a Grant Program in Uganda," Working Papers 326, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
    13. Glewwe, Paul & Kremer, Michael, 2006. "Schools, Teachers, and Education Outcomes in Developing Countries," Handbook of the Economics of Education, in: Erik Hanushek & F. Welch (ed.), Handbook of the Economics of Education, edition 1, volume 2, chapter 16, pages 945-1017, Elsevier.
    14. Stephane Straub, 2008. "Infrastructure and Growth in Developing Countries: Recent Advances and Research Challenges," Edinburgh School of Economics Discussion Paper Series 179, Edinburgh School of Economics, University of Edinburgh.
    15. Federici, Andrea, 2018. "Il rapporto tra capitale pubblico e altre variabili macroeconomiche: analisi della letteratura [The relationship between public capital and other macroeconomic variable: a literature review]," MPRA Paper 88515, University Library of Munich, Germany.
    16. Stephane Straub, 2011. "Infrastructure and Development: A Critical Appraisal of the Macro-level Literature," Journal of Development Studies, Taylor & Francis Journals, vol. 47(5), pages 683-708.
    17. Constantin Mang, 2016. "Market Consequences of ICT Innovations," ifo Beiträge zur Wirtschaftsforschung, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 70.
    18. Ng, Choy Peng & Law, Teik Hua & Wong, Shaw Voon & Kulanthayan, S., 2017. "Relative improvements in road mobility as compared to improvements in road accessibility and economic growth: A cross-country analysis," Transport Policy, Elsevier, vol. 60(C), pages 24-33.
    19. Stephen Smith, 2018. "Development Economics Meets the Challenges of Lagging U.S. Areas: Applications to Education, Health and Nutrition, Behavior, and Infrastructure," Working Papers 2018-7, The George Washington University, Institute for International Economic Policy.
    20. Li, Zhigang & Wu, Mingqin & Chen, Bin R., 2017. "Is road infrastructure investment in China excessive? Evidence from productivity of firms," Regional Science and Urban Economics, Elsevier, vol. 65(C), pages 116-126.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:8427. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://www.cepr.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.