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| Type | Working Paper |
| Scope | Discipline-based scholarship |
| Title | Chinese Roads in India: The Effect of Transport Infrastructure on Economic Development |
| Organization Unit |
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| Authors |
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| Language |
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| Institution | University of Zurich |
| Series Name | Center for Institutions, Policy and Culture in the Development Process |
| Number | 209 |
| Date | 2014 |
| Abstract Text | This paper uses a general equilibrium framework as in Eaton and Kortum (2002) to estimate the contribution of transport infrastructure to regional development. I apply the analysis to India, a country with a notoriously weak and congested transportation infrastructure. I first analyze the development effects of a recent Indian highway project that improved connections between the four largest economic centers. I estimate the effect of this new infrastructure on income across districts using satellite data on night lights. The results show aggregate net gains from the Indian highway project, but unequal effects across regions. China has followed a different highway construction strategy and has experienced more significant convergence across regions than India. I therefore use the model to gauge the effects of a counterfactual highway network for India that replicates the Chinese strategy of connect- ing intermediate-sized cities. I find that this counterfactual network would have benefited the lagging regions of India, but not the aggregate economy. I also construct additional counterfactuals and discuss their effects on economic development. |
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