The impact of infrastructure improvement on urban life quality and firm output

Zambia has embarked on an aggressive agenda of road-building in its bid for growth over the past couple of decades. Since landlocked countries tend to grow more slowly due to reduced openness to trade, infrastructure development is particularly critical for growth.

Research shows that after reaching a certain level of infrastructure capacity, the continued construction of new roads may not be economically justified. Furthermore, new road projects are often manifestations of political favour, which sheds light on persistent ambitious road-building despite a potentially minor increase in value. Also, infrastructure projects often suffer from corruption and a lack of accountability.

This project evaluates the impact of recent road development in urban areas of Zambia on quality of life and firm productivity. The researcher will examine the current road network, any changes the new roads have on cities, and the effects of improved market access on households and firms.

Using high-resolution satellite imagery and survey data, the first part of the project will establish comprehensive documentation and digitisation of roads projects and the quality of roads in Zambia, in 2007 and 2013. Next, using a difference-in-differences approach, the researchers will compare the change in household welfare and firm output before and after a city becomes connected to a new road with the change in outcomes of cities that do not get connected.

The results of this project aim to help guide policymakers’ implementation of Zambia’s Seventh National Development Plan for 2017-2021. Given the scale of road investment and the country’s fiscal deficit, this study will provide a tool for the Zambian Ministry of National Development Planning, Ministry of Finance, and Ministry of Infrastructure and Housing, which houses the Road Development Agency, to enhance the allocation efficiency of infrastructure investments.

Overall, this project will make an important contribution to studying the socioeconomic impacts of infrastructure investments which are relevant to researchers and policymakers alike.