Rail Revival in Africa? The Impact of Privatization

Abstract

I explore the impact of railway privatization on local economic activity in Sub-Saharan Africa using a novel spatial panel dataset – light density measured by satellites at night. The data comprises a panel of 0.3x0.3 decimal degrees grid cells over the period 1992-2010, covering thirty-two countries. I find a positive, significant and localized (less than 20km) impact of privatization. Furthermore, the results suggest that the impact grew over time. Placebo tests prior to privatization suggest the effect is not due to selection bias – areas close to privatized lines were, if anything, in relative decline prior to privatization.

Citation

Lowe, M. Rail Revival in Africa? The Impact of Privatization. Presented at Joint RES-SPR Conference on “Macroeconomic Challenges FacingLow-Income Countries,” Washington, DC, January 30–31, 2014. International Monetary Fund, Washington DC, USA (2014) 27 pp. + 15 pp. (Appendices) pp.

Rail Revival in Africa? The Impact of Privatization

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