What are returns to infrastructure spending in India? Two studies looked at two UPA+NDA era investments (Asher and Novosad 2020, Burlig and Preens 2022) - rural electricity and rural roads. Both find no impact on rural welfare indicators over 5-10 year periods. How/Why? (1/4) Both schemes had population cutoffs so they look at villages just below cutoff (did not get connections/roads) and just above (did get connections/roads). No difference in welfare indicators. So yes, we need roads/power but it's not enough by themselves. These are facts.(2/4)

This is not an NDA vs UPA post. But as India approaches elections, there’s a lot of chatter about how the current govt is doing well because they are spending more on infrastructure. Capex is up. Is this the best way of looking at performance? (1/6) We are often awestruck by Chinese infrastructure-wide roads, trains, fancy skyscrapers. But this is both an input to economic growth *and* an outcome. And research shows infra alone does not lead to economic transformation. (2/6)

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