Power of Hydroelectric Dams: Historical Evidence from the United States over the Twentieth Century.

This article systematically evaluates the local economic impacts of all large-scale hydroelectric dams built in the United States during the twentieth century, focusing on differences between dams constructed before and after 1950. Using panel event-study designs and synthetic control methods, it finds that pre-1950 dams generated a significant "cheap-local-power" (CLP) advantage, leading to substantial short- and long-run local growth—more than doubling population density after 60 years—likely due to agglomeration spillovers. In contrast, post-1950 dams had only modest effects, attributed to technological advances such as high-tension transmission lines that attenuated the CLP advantage and differences in the suitability of dam locations for broader economic development. The study also employs Oaxaca–Blinder decompositions to show that proximity to metropolitan areas explains part, but not all, of the difference in impacts, suggesting that the fading CLP advantage played a key role in the diminished effects of later dams.