An impact evaluation of investment in infrastructure: The case of a railway connection in Uzbekistan

The Tashguzar-Baysun-Kumkurgan (TBK) railway connection, completed in 2007 in southern Uzbekistan, provided a domestic through line to link rail stretches formerly connected only via neighboring Turkmenistan. We hypothesize that a better integrated domestic rail system would yield economic spillovers beyond the regions actually traversed by the new connector to generate higher growth for neighboring regions and even for the far terminal reaches of the system. We test for this using a difference in difference approach that assesses the impact of the rail connector on economic performance for each of three regional groupings relative to a control group of unaffected regions. We further distinguish effects for the short term (2008), medium term (2009-10), and long term (2011-12). We find statistically significant increases in GDP growth for all three regional groupings at medium or long term horizons with magnitudes of increase up to 2.6 percentage points per year.