Domestic road infrastructure and international trade: Evidence from Uganda

Abstract

This paper exploits Uganda’s large-scale road-upgrading programme—spanning 2006-2023 and covering 2,100 km of primary
corridors—to estimate the causal impact of domestic road infrastructure on international trade. Combining geolocated project data
with firm-level customs records, satellite-based travel-time indices, and a difference-in-differences design, we find that a 10 %
reduction in domestic travel time to a border or port raises manufacturing exports by 7.3 % and processed agricultural exports by 4.6
%. The effects are strongest for small and medium-sized firms and for products with time-sensitive or high-weight-to-value ratios.
Improved roads also increase the extensive margin of trade: the number of exporting firms rises by 9 % in treated districts, driven by
new entrants in textiles and horticulture. Import flows exhibit parallel gains, concentrated in intermediate and capital goods.
Counterfactual simulations indicate that the completed road programme has lifted Uganda’s total trade value by US$1.2 billion (2.8 %
of GDP) and reduced unit transport costs by 12 %. These gains are equivalent to a 4-percentage-point tariff cut for the median
sector. Our results highlight that, for a land-locked country, high-quality domestic roads are a first-order determinant of export
competitiveness and regional integration.

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