An Impact Evaluation of Investment in Infrastructure: The Case of the Railway Connection in Uzbekistan

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in Asian Development Bank InstituteThe Working Paper series is a continuation of the formerly named Discussion Paper series; the numbering of the papers continued without interruption or change. ADBI's working papers reflect initial ideas on a topic and are posted online for discussion. ADBI encourages readers to post their comments on the main page for each working paper (given in the citation below). Some working papers may develop into other forms of publication. Umid Abidhadjaev is a research associate at ADBI.The authors would like to thank Georg Inderst, Sahoko Kaji, Khalilillo Khamidov, Marie Lall, Colin McKenzie, Masao Ogaki, Alfredo Pereira, Victor Pontines, and Michael Regan, as well as the participants of the Public Economics Seminar at Keio University, the AICILS conference at the University of Oxford, and the ICHE conference at Cornell University for their comments and meaningful contributions to earlier discussion of the results of the current research. Umid Abidhadjaev would also like to acknowledge the financial support provided by the Head Office of the Research Development and Sponsored Programs at Keio University under the Keio University Doctorate Student Grant-in-Aid Program.The views expressed in this paper are the views of the authors and do not necessarily reflect the views or policies of ADBI, ADB, its Board of Directors, or the governments they represent. ADBI does not guarantee the accuracy of the data included in this paper and accepts no responsibility for any consequences of their use. Terminology used may not necessarily be consistent with ADB official terms.Working papers are subject to formal revision and correction before they are finalized and considered published.Asian Development Bank Institute Kasumigaseki Building 8F 3-2-5 Kasumigaseki, Chiyoda-ku Tokyo 100-6008, Japan AbstractThe objective of this paper is to examine the nature and magnitude of the effects of infrastructure provision on regional economic performance. The empirical evidence of our analysis is based on difference-in-difference estimation linking the changes in the growth rate of regional-level economic outcomes in affected regions to the newly built railway connection in the southern part of Uzbekistan, conditioned on the regions' timeinvariant individual effects, time-varying covariates, and evolving economic characteristics. To explore the differential nature of infrastructure provision, we employ an estimation examining re...

On the Road: Connectivity infrastructures in Southeast Asia

“…Differently than the two other studies cited above, the results also support the hypothesis of positive spillover effects across the territory, showing that the positive impact of infrastructure provision extends to neighboring regions. Similar results are achieved in a study on the economic impact of the Tashguzar-Boysun-Kumkurgon railway line in Uzbekistan (Yoshino and Abidhadjaev, 2015).…”

“…Faber (2014) suggests that the construction of the national trunk highway system of the People's Republic of China would have led to a loss in output growth among neighboring counties not touched by the highway. On the grounds of historical data from the colonial period in India, Donaldson (2014) finds that railroad increased the income of areas directly connected to the infrastructure, but had negative effects on the income of areas excluded from railroad access (Yoshino and Abidhadjaev, 2015).…”

Innovative Financing for City Infrastructure Investment by Increasing the Rate of Return from Spillover Tax Revenues

“…In other words, the railway produced a 2.0% increase in GDP growth as a result of its spillover effects compared to other regions, which created huge tax revenues for the government. A detailed analysis can be seen in Yoshino and Abidhadjaev (2017).…”

“…A dummy variable was introduced for before-after the construction periods by taking the difference in the tax revenues between two regions: a value of 1 for the region along the infrastructure and 0 for the other regions where there was no impact of infrastructure investment. As shown in Table 4, the railway provided a 2% difference in their economic growth due to the spillover effects compared to other regions, which created huge tax revenues for government (Yoshino and Abidhadjaev 2017).…”

Meeting Asia's Infrastructure Needs

“…The estimated social return of the investment reaches 10% annually in the most conservative case. Yoshino and Abidhadjaev (2015) provide some evidence that a newly built railway in south Uzbekistan may have caused 0.4%~2.0% GDP growth in the regions affected. Finally, Chen and Whalley (2012) show that the opening of the new rail transit system in Taipei,China reduced air pollution from carbon monoxide, a key tailpipe pollutant, by 5%-15%.…”