Half a billion people in rural Sub-Saharan Africa remain without electricity. We document that many grid-connected villages in the region have either near-zero or near-full electricity adoption, indicating an indivisibility in local electrification. We highlight one source of indivisibility, the local low-voltage network, and how anchor customers help overcome it. Exploiting the roll-out of a country-wide electrification program in Zambia, we find that widespread electricity adoption upon grid arrival and ensuing development effects are confined to villages with pre-existing energy-dependent firms. Further evidence suggests that both cost and demand externalities of connecting these firms explain the local success of electrification.

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%).

While structural transformation is often viewed as labour moving from villages to existing cities, less is known about whether labour demand shocks can create new centres of economic activity in rural areas. We study Kenya’s cut-flower industry, whose flower farms combine two features rarely observed together in rural Africa: they generate large numbers of stable, year-round wage jobs, and disproportionately employ women, in previously agricultural communities. Using a difference-in-differences design around the staggered arrival of flower farms, we find a home-to-market shift in women’s work: wage employment rises by 15-20% while work on family farms and businesses declines. Rural locations urbanise rapidly: in-migration fuels population growth, nighttime luminosity rises, a private rental market for housing forms and urban amenities emerge. Within less than two decades, these once-agrarian villages resemble towns. Correspondingly, households also grow wealthier, secondary schooling increases especially for girls, and young women marry later and bear fewer children.

Rural electrification is characterised by high costs of extending the grid to remote places and its low utilisation. Previous work highlights the considerable welfare losses that can result from connecting rural households. Regardless, the World Bank’s ‘Mission 300’ aims to dramatically accelerate rural electrification – investing USD30bn to reach 300 million people in Sub-Saharan Africa by 2030. Does electrification imply a potential social value that could warrant such investments? In this paper, we analyse how electrifying public infrastructure such as schools and health facilities across 556 villages in rural Zambia can generate social value: exploiting the staggered roll-out of the grid to remote places, a government mandate to electrify any public infrastructure, and rich administrative data on schools and health posts, we find that electrified schools attract more, younger and better qualified teachers, retain headmasters for longer, and see more students enrol. National exam test scores improve, especially for girls. Electrified health facilities benefit from refrigeration to administer more vaccinations, gain skilled staff who oversee more deliveries, and lower child mortality. Compared to the considerable cost of rural grid expansion, we find that a substantial share of villages gained welfare just from the electrification of their public infrastructure alone. We provide a lower bound of the average welfare effect of grid expansion under an extreme assumption of zero economic benefits in connected places.