Noel Maurer and Carlos Yu have a new working paper on: What Roosevelt Took: The Economic Impact of the Panama Canal, 1903-29. Unsurprisingly, they argue that the United States, not Panama, benefited the most from the canal’s construction. (Didn’t everyone know this going in?) They then draw a warning for other developing countries:
Panama’s experience with the Canal, therefore, holds warnings for modern underdeveloped countries that seek to rapidly develop through the construction of large infrastructure projects, be they pipelines (as in Central Asia and Africa) or “land bridges” (as in Central America). The spillovers from such projects may prove disappointing.
The warning is valid; but I just think the Canal is too unique of a project to be a case study for drawing major conclusions from. An interesting fact in the paper was that the greatest benefits from the Canal for the Panamanian people was improved healthcare technologies, in particular anti-malaria campaigns. Oh, and they are now debating adding a $5.25bn third lane to the canal by 2014.