Road Development and Poverty Reduction: The Case of Lao PDR

Lack of access to good road networks is a major constraint on the incomes and welfare of the poor. Quantifying the precise impact of this constraint is challenging.

Using recently available household expenditure survey data for Lao PDR this paper models the causes of poverty there and shows the impact on overall poverty levels of road improvements. As expected the impact is substantial: over 30% of rural households have no satisfactory road access. The paper is of interest not just for discussions on Lao PDR, but also for its methodology which can be applied elsewhere.

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1. Karel Martens
   (posted 29 June 2007 / 05:44:52 PM)
   
   It is important to note that roads will only alleviate poverty if it goes together with a transport service that is accessible for the poor. The expectation that roads alleviate poverty is based on the assumption that some form of para-transit will be available to travel with or without goods.
   In current circumstances, such services will most likely be provided by the market. However, as affluence increases, so will car ownership, and the same roads build to alleviate poverty, may become instruments to increase the gaps between those with and those without cars.
   it is therefore important to stress what is alleviating poverty: not the roads as such but the transport service it provides to the poor. By focusing on the transport service rather than roads the proper link between poverty alleviation and accessibility is made.