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TOPIC:
Cross-border Spillover Effects of Dams along International Rivers
ABSTRACT
Hydropower dams along international rivers often spark disputes due to cross-border spillover effects. We examine the impact of upstream dams which do not internalize downstream costs, by looking at Chinese dams on the Mekong River located near the Chinese border with downstream countries. Using machine learning and difference-indifference methods, we find that, on average, dams smooth downstream water levels across seasons and improve agricultural productivity. However, when facing extreme weather events, dams’ operational priorities can conflict with downstream interests, exacerbating adverse weather shock damages. Our findings shed light on the conditions under which international spillover effects of dams turn negative.