The Economic Impacts of Rural Water Supply Infrastructures in Developing Countries: Empirical Evidence from Senegal

Abstract The paper addresses the often-neglected economic impacts associated with the supply of hydraulic infrastructure in rural and under-serviced communities in developing countries. We rely on a rich panel dataset including 1319 Senegalese rural households collected in 2016 and 2020, during the deployment of the first phase of the Emergency Program for Community Development (PUDC). By combining propensity score matching (PSM), inverse probability weighting, difference-in-differences, and quantile regression, we find that access to piped water improves employment in the agricultural sector but has no significant impact on household expenditures. After controlling for attrition, through PSM, we find that the employment effect operates through access to a greater quantity of water and a reduction in the time women devote to water fetching chores. Moreover, when bundled with complementary infrastructure interventions such as the construction of rural roads, we find that access to water services generates an even higher impact. The quantile analysis shows that non-poor households seem to benefit more from the provided water supply infrastructure compared to poor households. Finally, when comparing the welfare effect of government-led PUDC water supply with that of community-led initiatives, our findings advocate for the widespread implementation of the former for reasons of cost-effectiveness.