The Welfare Impacts of Local Investment Projects: Evidence from the Guatemala FIS

Mar 2008
This paper assesses the welfare impacts of local investments projects in rural areas of Guatemala. Using census track data from two rounds of the Guatemalan population census, as well as administrative data on investment projects, the authors estimate the impact of education, sanitation, productive, and total investment activities at the village level on measures of welfare. This is the first impact evaluation of social funds in Guatemala, and also the first paper that uses village level data, and both a multi-treatment effect approach and the generalized propensity score with continuous treatments to analyze this type of interventions. The outcome is such that local investment in schools significantly boosts enrollment and investments in water and sewerage significantly improved measures of access to water. The authors also examine the welfare impacts in regards to infant mortality and school progression.