The causal effect of wrong-hand drive vehicles on road safety

Left-hand drive (LHD) vehicles share higher road accident risks under left-hand traffic because of blind spot areas. Due to low import prices, the number of wrong-hand drive vehicles skyrockets in emerging countries like Georgia, Kyrgyzstan and Russia. I identify the causal effect of wrong-hand drive vehicles on road safety employing a new “backward version” of the synthetic control method. Sweden switched from left-hand to right-hand traffic in 1967. Before 1967, however, almost all Swedish vehicles were LHD for reasons of international trade and Swedish customer demand. I match on accident figures in the period after 1967, when both Sweden and other European countries drove on the right and used LHD vehicles. Results show that right-hand traffic decreased road fatality, injury and accident risk in Sweden by approximately 30%. An earlier switch would have saved more than 4000 lives between 1953 and 1966.