Roads are instrumental to market access. Electricity is a key technology for modern production. Both have been widely studied in isolation. In reality, infrastructure investments are commonly bundled. How such big push infrastructure investments interact in causing economic development, however, is not well understood. I track the large-scale road and electricity network expansions in Ethiopia over the last two decades. First, causal evidence confirms markedly different patterns: all-weather road access alone increases services employment, at the expense of manufacturing. In contrast, additionally electrified locations see large reversals in manufacturing employment. Second, I develop a spatial general equilibrium model with non-homothetic preferences to highlight how bundling infrastructure investments can affect aggregate welfare. Third, I structurally estimate the implied welfare effects of big push infrastructure investments. Compared to no investments, welfare in Ethiopia increased by at least 2.88%, while isolated counterfactual road (electrification) investments would have increased welfare by only 2.34% (0.44%).

Electrification is highly positively correlated with economic development. However, causal evidence points to modest average effects of recent electrification programs in low- and middle-income countries at best. This paper unveils stark differences in the impact of grid access across locations underlying these average effects. First, we document that in rural Sub-Saharan Africa, the world’s least electrified region, most locations with grid access have either near zero or almost full electricity adoption. In other words, modest average connection rates mask a bimodal distribution across locations. Second, we empirically test for a potential determinant of successful electrification identified prominently in historical accounts and modern engineering plans: the productive use of electricity. Exploiting a large-scale, country-wide rural electrification program in Zambia, we provide three findings. First, the aggregate effects of rural electrification are mixed at best, confirming existing evidence. Second, locations with pre-existing productive uses experience almost full household electrification in contrast to near zero adoption elsewhere. Third, any development effects of rural electrification are confined to these same locations. We interpret the bimodal adoption and development pattern as reflective of the high fixed cost of the local electric network, and provide suggestive evidence that productive users help overcome the resulting ‘last mile problem’.