Impact Evaluation of Water Infrastructure Investments: Methods, Challenges and Demonstration From a Large‐Scale Urban Improvement in Jordan

Abstract Impact evaluation (IE) of large infrastructure presents numerous challenges, and investments in urban piped water and sanitation are no exception. Here we present methods for more systematic assessment of the implications of such interventions, discussing tradeoffs between validity, relevance and practicality that arise from alternative approaches. Then, to more clearly illustrate the many issues that typically arise in such IEs, we draw on an example application in Zarqa, Jordan, where the Millennium Challenge Corporation invested about US$275 million to upgrade and extend piped water and sewer networks, as well as increase the capacity of the country's largest wastewater treatment plant. The theory of change for the intervention took a systems view of impacts: the project aimed to improve water supply to urban areas while maintaining flows to irrigators through enhanced wastewater reuse. The case adds valuable evidence on the impacts of large infrastructure investments and illustrates well the challenges of capturing spillovers, mitigating study contamination, maintaining statistical power, and determining overall welfare effects, in situations involving diverse market and nonmarket impacts. These limitations notwithstanding, the application highlights the high value of conducting IEs, and why applied researchers should not give up on pragmatic and interdisciplinary collaborations to evaluation in the face of complex interventions.