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Study Overview

Ethiopia Expressway Development Project impact evaluation
Study ID:
Initial Registration Date:
Last Update Date:
Study Status:
In Development
The Government of Ethiopia has embarked on an ambitious road transportation development program, one component of which is the construction of an expressway between the cities of Mojo and Hawassa. This project is being implemented with support from the World Bank’s Ethiopia Expressway Development Project, as well as three other donors. This expressway is linked to the effort to develop a flagship industrial park in the city of Hawassa. Hawassa is approximately 900 km from Ethiopia’s nearest port in Djibouti, so upgraded transportation is critical for the industrial park’s export potential. More generally, significant upgrading of transport infrastructure is seen as a key precondition for Ethiopia’s industrialization in the long run, which is central to the country’s development strategy. We will use non-experimental methods to study the impact of expressway construction on economic activity in Ethiopia.
Additional Keywords:
transportation, special economic zones, remote sensing.
Secondary ID Number(s):

Principal Investigator(s)

Name of First PI:
Kevin Croke
World Bank
Name of Second PI:
Simon Alder
University of North Carolina - Chapel Hill

Study Sponsor

Study Sponsor Location:
United Kingdom
Funding Proposal:

Research Partner

Name of Partner Institution:
Ethiopia Roads Authority
Type of Organization:
Government agency (eg., statistics office, Ministry of Health)

Intervention Overview

The project’s main intervention is the construction of an expressway. The Mojo-Hawassa expressway will be sub divided in four sections, with 57 km in section 1, 37 km in section 2, 57 km in section 3 and 52 km in section 4, totaling 203 km. The road is also part of the Trans-East African Highway and links Ethiopia to Kenya. GoE has secured financing for sections 1 and 2 from the AfDB and Korea Exim Bank respectively. The World Bank finances section 3 from Batu (Zeway) to Arsi Negele, while China Exim Bank finances section 4. The new road runs parallel to, but generally some 3 to 4 km from the existing road and built-up areas. The new road will have two carriageways, each with two 3.65 meter wide lanes and paved outer and inner shoulders, as well as additional 0.75 meter unpaved shoulders. To increase the safety of the new road, grade separated junctions and a 9 meter wide median have been planned. As the road will be fenced to restrict access, 31 local crossings for animals and pedestrians will be provided at an average spacing of 1.8 kilometers, located on existing paths. Exits are designed to connect to the major towns along the corridor which will be serving as service centers.
Theory of Change:
The project is envisioned to benefit households both directly through lower transport times and costs, and indirectly, by enabling the efficient operation of the Hawassa Industrial Park and other large firms in the corridor catchment area. While in most road projects, the benefits of lower transport times and costs are the principal project benefit, in this case the links to the industrial park are likely to be the more significant benefit. This is because there is already an existing, improved trunk road along the corridor. Given that the expressway will have limited entry points and will (eventually) charge a toll, small-scale agricultural producers and households are likely to continue using the existing trunk road rather than the expressway. Second, for producers and consumers who are not shipping or traveling goods long distances, the marginal benefit of going from a paved trunk road to an expressway is likely to be relatively modest. By contrast, large firms, especially those that export or trade long distances, will be more likely to use the expressway and the reduction in travel times and costs that they experience will be more substantial. First, it may benefit households by enabling greater investment in industrial production and thus increased employment opportunities in industrial centers in Hawassa as well as other cities and towns along the highways. Second, increased industrial development may have backward linkages to local producers: for example new firms created in the industrial park may start to purchase inputs from local producers, and the new labor force will need food, housing and other services which can be provided in part by local residents. Third, as the envisioned 60,000 workers migrate to the Hawassa area from elsewhere in Ethiopia they will consume additional services in the area; this shifts economic activity to the corridor region, and if they are more productive after migration, it also generates aggregate economic gains.
Multiple Treatment Arms Evaluated?

Implementing Agency

Name of Organization:
Ethiopia Roads Authority
Type of Organization:
Public Sector, e.g. Government Agency or Ministry

Program Funder

Name of Organization:
World Bank
Type of Organization:
Foreign or Multilateral Aid Agency

Intervention Timing

Intervention or Program Started at time of Registration?
Start Date:
End Date:
Evaluation Method

Evaluation Method Overview

Primary (or First) Evaluation Method:
Difference in difference/fixed effects
Other (not Listed) Method:
Additional Evaluation Method (If Any):
Other (not Listed) Method:

Method Details

Details of Evaluation Approach:
The fundamental design which is shared across all outcomes is a difference-in-difference (in difference) model. This compares changes in a “treatment” group to changes in a set of controls. By focusing on changes over time, pre-existing differences between treatment and control are permissible. The key assumption is that while selection into treatment may be correlated with baseline characteristics, these characteristics are time-invariant. For selection of appropriate control transit corridors we take advantage of the fact that the ERA has selected a number of trunk roads for which it is planned to build expressways very similar to the one between Mojo-Hawassa. ERA has shared a GIS shapefile with us specifying the location of these planned expressways; they are essentially the other trunk roads radiating from Addis. These corridors also have the added advantage that almost all have a city with a planned industrial park located along them. There are 7 corridors that radiate out from Addis, or from proximate cities (Mojo, Adama). All of the planned expressways, and all of the planned industrial parks, are along these corridors.
Outcomes (Endpoints):
Outcomes of interest comprise (i) transport time ii) transport costs iii) firms profits, iv) firm exports, (v) firm investment, (v) firm entry and exit vi) firm-level employment and wages vii) aggregate night time luminosity.
Unit of Analysis:
Units of analysis include spatially-defined grid cells, and medium and large manufacturing firms (>10 employees)
The key questions are: does the expressway lower transport time and costs for firms which ship goods, primarily trucking firms, both to and from Hawassa? If so, are these cost reductions passed along to the households and firms which ship or receive goods in the form of lower prices? Do these price reductions then increase the profitability of existing businesses, by either lowering their input costs, or transport costs, or enabling them to sell in new markets? In the longer term, does this lead to investment by other businesses, creation of new firms, or relocation of firms to the expressway catchment area? Finally, does it generate increased aggregate economic activity in the regions served by the expressway?
Unit of Intervention or Assignment:
The intervention is applied at the level of the transport corridor.
Number of Clusters in Sample:
Number of Individuals in Sample:
We expect approximately 1,000 firms in the sample (based on Ethiopia's Large and Medium Manufacturing Industry Survey
Size of Treatment, Control, or Comparison Subsamples:
We expect approximately 200 firms in the treatment corridor and 800 firms in control corridors.

Supplementary Files

Analysis Plan:
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Outcomes Data

The government of Ethiopia currently conducts an annual census of all manufacturing firms (the LMMIS) with have more than 10 employees and which use electricity in production, with data which goes back to 1996. This survey collects data on all such firms on variables which are outcomes for this study such as employment, wages, quantity and value of total production and of exports, value and quantity of imports (imported and local), transport costs, investment.
Data Already Collected?
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Data Obtained by the Study Researchers?
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Treatment Assignment Data

Participation or Assignment Information:
We will assign firms (and grid cells) to treatment or control transport corridors based on their physical location, denoted by either the GPS coordinates.
Data Obtained by the Study Researchers?
Data Previously Used?
Data Access:
Not restricted - access with no requirements or minimal requirements (e.g. web registration)
Data Obtained by the Study Researchers?
Data Approval Process:
Approval Status:

Data Analysis

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Study Materials

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Registration Category

Registration Category:
Prospective, Category 1: Data for measuring impacts have not been collected

Completion Overview

Intervention Completion Date:
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Unit of Analysis:
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Preliminary Report:
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Summary of Findings:
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Data Availability

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Other Materials

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Description of Changes:

Study Stopped