Whether embankments should be used to control floods is a question of great importance in the eastern Gangetic plain, where embankment breaches cause severe flood damage every year and huge damage due to major breaches every few years. Critics of the embankment policy have called for a strategy of living with floods by building dispersed infrastructure to cope with floods. However, no cost–benefit analysis of alternative strategies is available. This paper makes a first pass at evaluating embankments. Using 2 years or more of data from 504 households in 28 villages in the floodplain of the Kosi river in north Bihar, the paper compares agricultural output, wage incomes, unemployment and other indicators of well-being in villages subject to flooding from rivers with those from villages not subject to such flooding. The paper finds that, for the most part, villages subject to river flooding are no worse off than villages not subject to such flooding. Thus, the evidence provides no support for the embankment strategy.

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