Nova School of Business and Economics and NOVAFRICA
University Jean Monnet
Working Paper No 2003
Revised December 2020
Despite the popularity of public works programs in developing countries, there is virtually no evidence on the value of the infrastructure they generate. This paper attempts to start filling this gap in the context of the PSNP — a large-scale program implemented in Ethiopia since 2005. Under the program, millions of beneficiaries received social transfers conditional on their participation in activities such as land improvements and soil and water conservation measures. We examine the value of these activities using a satellite-based indicator of agricultural productivity and (reweighted) difference-in-differences estimates. Results show that the program is associated with limited changes in agricultural productivity. The upper bound of the main estimate is equivalent to a 3.6 percent increase in agricultural productivity. This contrasts with existing narratives and calls for more research on the productive effects of public works.