Infrastructure Quality and the Subsidy Trap
研究了发展中国家对电力和水的补贴如何反而阻碍了基础设施投资，以哥伦比亚家庭用电需求的结构模型为例，分析了补贴对低质量电网升级的抑制作用。
Electricity and water are often subsidized in developing countries to increase their affordability for low-income households. Ideally, such subsidies would create sufficient demand in poor neighborhoods to encourage private investment in their infrastructure. Instead, many regions receiving large subsidies have precarious distribution networks supplying users who never pay. Using a structural model of household electricity demand in Colombia, I predict the change in consumption and profits from upgrading low-quality electricity connections. I show that the existing subsidies, which provide greater transfers to areas with unreliable supply, deter investment to modernize infrastructure. Finally, I analyze alternative programs with stronger investment incentives.