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The Role of Infrastructure in Mitigating Poverty Dynamics: The Case of an Irrigation Project in Sri Lanka

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  • Sawada, Yasuyuki
  • Shoji, Masahiro
  • Sugawara, Shinya
  • Shinkai, Naoko

Abstract

Although it is known that access to physical infrastructure enhances household welfare, there are hardly any micro-econometric studies that analyze the role of infrastructure in mitigating chronic and transient poverty. This paper aims to bridge this gap in the existing literature by evaluating the impact of a large-scale irrigation project implemented in Sri Lanka. We extend the seasonal consumption smoothing model of Paxson (1993) by introducing endogenous credit constraints. We collected unique household-level monthly panel data over a period of two years. According to the point estimates, with irrigation accessibility, per capita food and non-food consumption expenditures increase by around 20% and 45%, respectively, on average, and the probability of binding credit constraint is reduced by 5.6% during the dry season. The latter result implies that irrigation enhances households’ access to the credit market which, in turn, contributes to further reduction in transient poverty. These empirical results suggest that irrigation infrastructure has a positive impact on reducing both chronic and transient poverty. The structural estimation results support the validity of our theoretical framework.

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Bibliographic Info

Paper provided by International Association of Agricultural Economists in its series 2009 Conference, August 16-22, 2009, Beijing, China with number 51461.

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Date of creation: 2009
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Handle: RePEc:ags:iaae09:51461

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Keywords: Poverty Reduction; Role of Infrastructure; Monthly Panel Data; Consumer/Household Economics; Food Consumption/Nutrition/Food Safety; Food Security and Poverty; Risk and Uncertainty; O16;

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Cited by:
  1. Shoji, Masahiro & Aoyagi, Keitaro & Kasahara, Ryuji & Sawada, Yasuyuki, 2010. "Motives behind Community Participation," Working Papers 16, JICA Research Institute.
  2. Teguh, Dartanto & Nurkholis, Nurkholis, 2011. "Finding out of the Determinants of Poverty Dynamics in Indonesia: Evidence from Panel Data," MPRA Paper 41185, University Library of Munich, Germany.
  3. Yasuyuki Sawada & Ryuji Kasahara & Keitaro Aoyagi & Masahiro Shoji & Mika Ueyama, 2013. "Modes of Collective Action in Village Economies: Evidence from Natural and Artefactual Field Experiments in a Developing Country," Asian Development Review, MIT Press, vol. 30(1), pages 31-51, March.
  4. Sellamuttu, Sonali Senaratna & Aida, Takeshi & Kasahara, Ryuji & Sawada, Yasuyuki & Wijerathna, Deeptha, 2013. "How Access to Irrigation Influences Poverty and Livelihoods:A Case Study from Sri Lanka," Working Papers 59, JICA Research Institute.
  5. Aida, Takeshi, 2011. "Social Capital as an Instrument for Common Pool Resource Management:A Case Study of Irrigation Management in Sri Lanka," Working Papers 33, JICA Research Institute.
  6. Kurosaki, Takashi, 2012. "Urban Transportation Infrastructure and Poverty Reduction: Delhi Metro's Impact on the Cycle Rickshaw Rental Market," PRIMCED Discussion Paper Series 24, Institute of Economic Research, Hitotsubashi University.
  7. Majumder, Rajarshi, 2012. "Removing poverty and inequality in India: the role of infrastructure," MPRA Paper 40941, University Library of Munich, Germany.

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