Improving Infrastructure in Developing Cities: Experimental Evidence from India
Poor quality of infrastructure is common in low and middle-income countries. Empirical evidence on how to promote sustained upgrades and valuation remains highly limited. This paper tackles this limitation by concentrating on mechanisms to create value for the use and maintenance of infrastructure, raising willingness to pay (WTP) for their use, and reducing free riding. We focus on shared sanitation facilities in Uttar Pradesh, India. We implement a field experiment in the slums of the two large cities of the state. A total of 110 catchment areas are randomly allocated to either a control or two treatment groups. In a first treatment, we upgraded the quality of the facility and of the service rendered by distributing grants and financial rewards to the providers. In a second treatment, this intervention is supplemented by an intensive sensitization campaign among slum residents about the returns of a well-maintained facility. Using a wide variety of measurements, including surveys, lab-in-the-field experiments, structured community activities, and objective measurements, we study the behavior of both potential users and providers. The interventions achieved marginal improvements in infrastructure quality. Externally funded improvements crowded-out WTP, worsen attitudes in favor of free riding, and generated no increase in usage. Increased demand for public intervention in response to the interventions suggests that quality of infrastructure is not driven by market forces. A behavioural response of providers to the financial rewards, however, led to a decrease in free-riding that is sustained over time.
Antonella Bancalari is a Research Associate at the Institute for Fiscal Studies (IFS) and is joining the School of Economics and Finance at the University of St. Andrews from January 2021 as an Assistant Professor. She is also a Consultant at the Inter-American Development Bank (IADB). She has recently completed a PhD at the London School of Economics and Political Science (LSE), Department of Social Policy, and holds a Master in Public Administration – International Development from the LSE and a BSc in Economics from Universidad del Pacifico.
Antonella is an applied microeconomist and her research sits at the intersection of Development, Public and Health Economics. She uses applied econometrics and field experiments to understand the principles underlying effective public service delivery. You can learn more about her research in her personal website: https://www.antonellabancalari.com/