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The Impact of Rural Infrastructure Development on Poverty Reduction in Indonesia

Author

Listed:
  • Nuzul Achjar

    (Institute for Economic and Social Research, Faculty of Economics University of Indonesia)

  • Maddaremmeng A. Panennungi

    (Department of Economics, Faculty of Economics University of Indonesia)

Abstract

This study aims at providing an empirical evidence of the impact of the rural infrastructure on rural poverty reduction. By using survey data from six districts in Indonesia drawn from the Indonesia Rural Investment Climate Survey (IRICS, 2006) with a probit model, it is found that improvement in general road surface conditions in the village and education level of the head of the household tend to lower the probability of the household falling into poverty. This means that both physical and non physical infrastructure (human capital) in the rural area have significant impact on poverty reduction in rural areas. It must be further underlined that rural infrastructure development be it physical (roads, bridges, electricity, irrigation, etc) or non-physical (education and health, etc) not only improves rural economic capability, but also plays a direct and indirect role in reducing poverty.

Suggested Citation

  • Nuzul Achjar & Maddaremmeng A. Panennungi, 2009. "The Impact of Rural Infrastructure Development on Poverty Reduction in Indonesia," Economics and Finance in Indonesia, Faculty of Economics and Business, University of Indonesia, vol. 57, pages 339-348, December.
    • Handle: RePEc:lpe:efijnl:200916
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    Cited by:

    1. Juan Armando Torres Munguía & Inmaculada Martínez-Zarzoso, 2021. "Examining gender inequalities in factors associated with income poverty in Mexican rural households," PLOS ONE, Public Library of Science, vol. 16(11), pages 1-25, November.

    More about this item

    Keywords

    poverty; rural development; infrastructure;
    All these keywords.

    JEL classification:

    • P46 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Consumer Economics; Health; Education and Training; Welfare, Income, Wealth, and Poverty
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures

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