Local Infrastructure and the Development of the Private Sector: Evidence

As such, this paper provides one of the most granular and well-identified assessments available of the ability of public infrastructure investment to stimulate pri- vate sector development.5 The rest of the paper is structured as follows: Section 2 provides the context for the study and describes the experimental design; Section 3 describes the data used, Section 4 provides the simple experimental. [...] The timing of these censuses is remarkably fortuitous for a study of Hábitat, given that the first interval allows us to conduct a before-after analysis of the short-term impacts of the program on the private sector, and the 2018 wave allows us to examine impacts 7 years after the cessation of investment. [...] Table 2 provides our main analysis of the impact of the program, using all extant firms in each round of the data and so providing an omnibus test that combines the intensive and extensive margin impacts of the program. [...] Taken as a whole then, we can summarize the extensive margin results quite simply by saying that as of 2018 the treatment had resulted in about 1.5 percent of the total distribution of firms being different than the ones that would have existed in the absence of the program, with no effect on the total number of firms. [...] We undertake a back-of-the envelope calculation that calculates the effects of the intervention on the total value of firm outcomes that are taxed by the government (Table A14), and then applies the appropriate marginal tax rates to these totals to back out the fiscal implications of the intervention (Table A15).