This paper examines the effects of improvements in infrastrucutre on sectoral growth and
firm-level investment, focusing on six Latin American countries. Exploiting the
heterogeneity in the quality of infrastructure across countries and the intrinsic variation in
the dependence of sectors on infrastructure, I find that better infrastructure raises growth
and investment. Improved infrastructure could yield large economic benefits. For
example, if the quality of infrastructure in Colombia increased to the sample median
(Czech Republic), GDP growth would increase by about 0.1 percentage points.