Transport Infrastructure and Poverty Reduction: Micro-Level Impacts

The extent to which transport infrastructure can directly contribute to poverty reduction seems to depend on its impact on income and non-income dimensions of poverty at the micro-level.

In terms of income poverty, transport infrastructure opens up opportunities for the poor to raise the productivity of their limited resources. In rural areas, where most of the poor reside and where agriculture remains the main source of income, transport infrastructure lowers the costs of inputs and facilitates access to credit, extension services, and most importantly, output markets with better prices. It also facilitates the commercialization of farm and nonfarm activities and often leads to agricultural diversification from low-value food grains to more perishable, high-value agricultural products.

An ADB study in 2005 provides empirical evidence to support these theoretical linkages. Based on field research in India, Thailand, and the PRC, the study finds that rural transport improvements decreased costs to the poor for personal travel and goods transport. Rural transport improvements are also revealed to have generated farm income, promoted nonfarm activities, and increased the range of opportunities for wage employment as well as the wage rates of labor in rural areas.

In terms of non-income poverty, transport infrastructure can likewise generate direct impacts by lowering the cost of services needed by the poor, and by serving as a good complement to interventions that seek to improve access to health, education, and other social services. Transport investments may also play an important role in mitigating risks faced by poor households.

The same study finds that rural transport investments increased the availability and accessibility of education and health care services in rural areas, resulting in greater participation in these programs by the poor. Rural roads also facilitated the delivery of emergency relief to the poor in case of natural disasters.

For all of these reasons, across Asia and the Pacific, the rural poor often give very high priority to improvements in transport (Rayner, 2005), and both the poor and non-poor alike see positive impacts and welcome investments in transport infrastructure (Cook, 2005).

Comment(s)

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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.