Some of the known causes of polyhydramnios include: 1  A birth defect that affects the baby's gastrointestinal tract or central nervous system. 2  Maternal diabetes.3  Twin-twin transfusion — a possible complication of identical twin pregnancies in which one twin receives too much blood and the other too little.ome of the known causes of polyhydramnios include: 1  A birth defect that affects the baby's gastrointestinal tract or central nervous system. 2  Maternal diabetes.