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The Effect of Infrastructure Access and Quality on Non-Farm Enterprises in Rural Indonesia

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  • Gibson, John
  • Olivia, Susan

Abstract

Summary There is growing interest in the rural non-farm sector in developing countries as a contributor to economic growth, employment generation, livelihood diversification, and poverty reduction. Access to infrastructure is identified in some studies as a factor that affects non-farm rural employment and income but less attention has been paid to the constraints imposed by poor quality infrastructure. In this paper, we use data from 4,000 households in rural Indonesia to show that the quality of two key types of infrastructure--roads and electricity--affects both employment in and income from non-farm enterprises. It appears that there would be gains from development strategies that improve both the access to and the quality of rural infrastructure.

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Bibliographic Info

Article provided by Elsevier in its journal World Development.

Volume (Year): 38 (2010)
Issue (Month): 5 (May)
Pages: 717-726
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Handle: RePEc:eee:wdevel:v:38:y:2010:i:5:p:717-726

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For corrections or technical questions regarding this item, or to correct its listing, contact: (Jeroen Loos).

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Keywords: infrastructure non-farm employment Indonesia;

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References

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  1. Escobal, Javier, 2001. "The Determinants of Nonfarm Income Diversification in Rural Peru," World Development, Elsevier, vol. 29(3), pages 497-508, March.
  2. Jacoby, Hanan C, 2000. "Access to Markets and the Benefits of Rural Roads," Economic Journal, Royal Economic Society, vol. 110(465), pages 713-37, July.
  3. Fan, Shenggen & Chan-Kang, Connie, 2004. "Road development, economic growth, and poverty reduction in China," DSGD discussion papers 12, International Food Policy Research Institute (IFPRI).
  4. Lanjouw, Peter, 1999. "Rural Nonagricultural Employment and Poverty in Ecuador," Economic Development and Cultural Change, University of Chicago Press, vol. 48(1), pages 91-122, October.
  5. Anne Booth, 2002. "The Changing Role Of Non-Farm Activities In Agricultural Households In Indonesia: Some Insights From The Agricultural Censuses," Bulletin of Indonesian Economic Studies, Taylor and Francis Journals, vol. 38(2), pages 179-200.
  6. Lanjouw, Peter, 2001. "Nonfarm Employment and Poverty in Rural El Salvador," World Development, Elsevier, vol. 29(3), pages 529-547, March.
  7. Alberto Isgut, 2004. "Non-farm Income and Employment in Rural Honduras: Assessing the Role of Locational Factors," The Journal of Development Studies, Taylor and Francis Journals, vol. 40(3), pages 59-86.
  8. Corral, Leonardo & Reardon, Thomas, 2001. "Rural Nonfarm Incomes in Nicaragua," World Development, Elsevier, vol. 29(3), pages 427-442, March.
  9. Gibson, John & Rozelle, Scott, 2003. "Poverty and Access to Roads in Papua New Guinea," Economic Development and Cultural Change, University of Chicago Press, vol. 52(1), pages 159-85, October.
  10. Haggblade, Steven & Hazell, Peter B. R. & Reardon, Thomas, 2009. "Transforming the rural nonfarm economy: Opportunities and threats in the developing world," Issue briefs 58, International Food Policy Research Institute (IFPRI).
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