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Estimating the impact of access to infrastructure and extension services in rural Nepal:

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  • Dillon, Andrew
  • Sharma, Manohar
  • Zhang, Xiaobo

Abstract

During the period of Nepal's ninth Five-Year Plan (1997–2002), agricultural growth in the predominantly rural society was disappointing. The recent peace process, however, gives the country new opportunities to develop its economy with less interference due to internal conflict. This research monograph investigates how Nepal might seize these opportunities by increasing agricultural growth and poverty reduction through improvements in roads, irrigation, and rural extension. The authors evaluate the impact of public investments in these areas by using two types of data and methodology: a hedonic approach that relates access to public infrastructure and services to land value and a panel of household-level data on consumption, poverty, and income. The hedonic methodology suggests a positive relationship between investments in irrigation and extension and household welfare, although the panel data approach suggests otherwise. This result reinforces the importance of methodology in evaluating rural investments. Rural roads yielded more clear-cut findings, however: both approaches agree that investment there has a positive relationship with household welfare, as measured in land values, consumption growth, poverty reduction, or agricultural income growth. The authors recommend increased public investments in rural roads, irrigation, and extension, as well as further research into precisely how infrastructure and services affect rural households' welfare and how their effectiveness can be improved. This monograph will be useful to policymakers, researchers, and others concerned with Nepal's future development.

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Bibliographic Info

Paper provided by International Food Policy Research Institute (IFPRI) in its series Research reports with number andrewdillon.

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Date of creation: 2011
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Handle: RePEc:fpr:resrep:andrewdillon

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Keywords: Agricultural growth; Poverty reduction; Public investments; hedonic approach; household data; policymakers; Rural development; infrastructure; Rural conditions; Economic aspects;

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  1. Mogues, Tewodaj & Ayele, Gezahegn & Paulos, Zelekawork, 2007. "The bang for the birr: Public expenditures and rural welfare in Ethiopia," IFPRI discussion papers 702, International Food Policy Research Institute (IFPRI).
  2. Jacoby, Hanan G., 1998. "Access to markets and the benefits of rural roads," Policy Research Working Paper Series 2028, The World Bank.
  3. Quy-Toan Do & Lakshmi Iyer, 2010. "Geography, poverty and conflict in Nepal," Journal of Peace Research, Peace Research Institute Oslo, vol. 47(6), pages 735-748, November.
  4. Stefan Dercon & Daniel O. Gilligan & John Hoddinott & Tassew Woldehanna, 2009. "The Impact of Agricultural Extension and Roads on Poverty and Consumption Growth in Fifteen Ethiopian Villages," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(4), pages 1007-1021.
  5. Fan, Shenggen & Zhang, Linxiu & Zhang, Xiaobo, 2002. "Growth, inequality, and poverty in rural China: the role of public investments," Research reports 125, International Food Policy Research Institute (IFPRI).
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