Improving Transport Infrastructure Direct Impact on Poverty

In developing countries, extending transport infrastructure to provide universal access will continue to be a priority, but at the same time, there is clearly a pressing need to make poverty reduction an integral part of transport infrastructure policy. Meanwhile, many other factors influence the impact of transport infrastructure on poverty reduction, most of which are exogenous to infrastructure interventions, e.g., macroeconomic conditions such as governance, conflict, and physical factors such as population, density, resource endowments, climate and terrain. These factors likewise give rise to bottlenecks that prevent transport infrastructure from benefiting the poor, and must also be sufficiently incorporated in the design and management of transport infrastructure projects. Some of the more critical interventions in this regard include the following:

Poverty analysis

To be effective in addressing poverty, there is a need to put asserted effort to explicitly identifying the poor or disadvantaged groups that will be affected by transport infrastructure projects; carrying out poverty analysis; and incorporating the results of such an analysis into project design. Components spelling out explicit activities should be incorporated to ensure that poverty issues are addressed throughout the project cycle.

Choice of investment and poverty targeting

Equity considerations require some form of targeting and prioritization of transport investments that have the greatest impact on poverty. For instance, among the different types of transport infrastructure, targeting investments to road infrastructure could make the most sense since it has been highlighted in the past as an important determinant of poverty reduction. Besides addressing the question of what to invest in, there is also the equally important question of where to invest. Given that poverty incidence tends to be higher in rural areas, targeting rural areas that lack access to basic transport infrastructure and services can be expected to have the biggest impact on poverty reduction.

Transport services policy

Improving transport infrastructure’s impact on poverty does not only entail physical access but affordability as well. This requires ensuring that the poor benefit from savings in operating costs, and that the resulting change in transport services is affordable to the poor. Here the primary policy instrument is to ensure effective competition in transport services, allowing operators to set their own fares and new operators to enter the market so that efficiency is encouraged. As Rayner (2005) states: “The lower the level of fare and entry regulation, the higher the chance of infrastructure investment contributing to poverty reduction.”

There has been some debate regarding how far the competitive environment can be used to positively influence the distribution of benefits. At the crux of this debate lies the possible trade off between allowing competition in the transport sector and the potential need for regulation to protect the interest of consumers. The ADB study (2005) reveals that lowcost, publicly provided services that fail to meet minimum standards of comfort, safety and reliability are not highly valued by the poor. In this regard, Rayner (2005) argues that quality regulation is necessary at all times, to ensure safety standards.

However, quality standards that are too rigorous could also displace non-motorized or informal transport services, which are also very important for the poor, particularly those in the rural areas. Maintaining the informal transport sector can also contribute to direct poverty reduction because it offers income-generating possibilities for the poor. Governments may therefore need to practice a more tolerant attitude towards these kinds of service providers, without unduly exposing users to safety risks.

Addressing maintenance issues

Quite obviously, there is a need to discover new approaches that will guarantee a more appropriate level of investment and better implementation of road maintenance. Since project activities are more visible and easier for donors to finance, one possible way of overcoming political and financial constraints could be to re-package or neatly bundle maintenance activities into a project. In other words there might be a need to “projectify” maintenance; bundles of activities pertaining to maintenance could be packaged into a project equipped with all the conventional elements of public projects i.e. project documentation to provide data on the problem area, the course of action required, as well as the rates of expected return. As a project, maintenance activities could become viable to politicians and donors (McCawley, 2005).

However, the most feasible and sustainable solution seems to lie in shifting the responsibility of maintenance away from the government and donors towards greater cost recovery, through mechanisms such as Road Funds, or towards broader participation of beneficiaries at the local level. At present, there is very little involvement of beneficiaries who are often very willing to participate in maintenance efforts, even to the extent of contributing to the cost of maintenance either in cash or in kind. While some might argue that local contributions could not possibly be sufficient to cover the necessary expenditures, experience tells us that only very small amounts are required initially to meet maintenance requirements. However, the costs tend to rise rapidly as deterioration progresses, exceeding local capacities and budgets (ADB, 2002b). Nevertheless, maintenance schemes with participation of the private sector in the local communities should be further encouraged.

Promoting participatory project design and management

Beyond addressing maintenance issues, adopting a participatory process and giving beneficiaries a voice in decision-making should become standard practice in the overall design and management of transport projects. Instituting some forms of local participatory process is arguably the best way to ascertain the transport needs of the poor and specific social groups, such as women, as well as determine the kind of safeguards required by those who might suffer negative effects.

Providing complementary services

All of the measures that have been proposed thus far fall within the ambit of transport sector policy, but it has been demonstrated that transport infrastructure’s impact on poverty is greatest in the presence of complementary services, which are provided by other sectors. Improvement in physical access should be integrated with other interventions such as schools, health clinics, agricultural support programs, and ICT services. This highlights the importance of cross-sector investment planning.

Minimizing the trade-offs

Despite the best and most well-meaning efforts to make transport investments more propoor, the trade-off between maximizing growth and minimizing poverty reduction or the tradeoff between providing access/affordability and maximizing quality will continue to remain challenging realities. Experience from PRC suggests that where income distribution is skewed, the choice of investing in rural or low-grade road to benefit the poor may be a more appropriate choice.

On the trade-off between access/affordability and quality, it seems that there should be an effort to define a set of minimum standards and regulations that can adequately address the needs of the poor. There should be a proper balance between the trade offs between access/affordability and quality, although the combination and the balance of the trade offs will tend to differ depending on prevailing conditions.

Comment(s)

There are [2] comment(s) for this entry. Post a comment.

1. Anura Widana
   (posted 28 April 2010 / 07:19:56 PM)
   
   Excellent study, hats off to authors!
   Wish to add three more reasons why poor have not benefited from investments on infrastructure.
   a) In the planning process, the poor people were not identified and planning itself was undertaken poor exclusive
   b) The method/s adopted to rehabilitate/ build infrastructure have not been pro-poor. The implementation team decided to get construction work done through private contractors or politicized institutions both of which did not pay attention to poor in the area. Their main interest was to maximize profits for themselves from investments. Hence, poor lost the opportunity to work in construction and thereby could not benefit by way of wages.
   c) The design teams did not include poverty/social but technical specialists only. This made it difficult for implementers to identify poor people, to plan strategies to get them involved and to brain-storm on other projects/activities to be funded so that poor people benefit more from investments.
2. Mohammad Ziaul Ahsan
   (posted 23 April 2006 / 09:49:14 PM)
   
   Transport not only makes econmic development but also saves climate. This book has given us such path to make sustainable development for poverty eradication. Thanking you for your great participation.