The Role of Public Infraestructure in Market Development in Rural Peru
Abstract
This Study provides a conceptual framework to study the impact of rural infrastructure investment in market development and in the enhancement of income generating opportunities for the poor in rural Peru. The study uses descriptive methods and regression analysis together with relatively new impact evaluation techniques, like propensity score matching, to understand the causal paths through which the access to new or improved infrastructure services affect the livelihood strategies and livelihood outcomes of rural households. The data sources included in this study include regional time series data, several cross-section household level data sets coming from rural representative Living Standard Measurement Surveys; a household panel data set coming from the same source, together with specialized surveys developed by the author. The analysis shows that there are important complementarities in rural infrastructure investment. That is, even if any particular infrastructure investment (related to roads, electricity, telecommunication, water, or sanitation services) may be subject to diminishing returns, if done in isolation, this effect can be overcome if it is done in combination with other investments. In this way it is possible to get a sustained growth effect on rural incomes from infrastructure investment. The study shows that infrastructure investments reduce transaction costs and enhances the opportunities for spatial arbitrage, paving the way for improving market efficiency. However, the study warns that efficiency and equity gains may not occur simultaneously, because those that are better off in rural areas may obtain higher returns to infrastructure investments because of a larger private asset base or because of a better access to other public infrastructure.Download Info
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Date of creation: Apr 2005
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Keywords: Peru; rural infrastructure; poverty; economic geography; rural roads; impact evaluation; non-agricultural employment;Find related papers by JEL classification:
- I38 - Health, Education, and Welfare - - Welfare and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
- Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
- R12 - Urban, Rural, Regional and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
- D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
- O18 - Economic Development, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
This paper has been announced in the following NEP Reports:
- NEP-AGR-2007-01-14 (Agricultural Economics)
- NEP-ALL-2007-01-14 (All new papers)
- NEP-DEV-2007-01-14 (Development)
- NEP-GEO-2007-01-14 (Economic Geography)
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Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Antonio Estache, 2010. "A survey of impact evaluations of infrastructure projects, programs and policies," Working Papers ECARES 2010_005, ULB -- Universite Libre de Bruxelles.
- Reardon, Thomas & Pingali, Prabhu L. & Stamoulis, Kostas G., 2006.
"Impacts of Agrifood Market Transformation during Globalization on the Poor's Rural Nonfarm Employment: Lessons for Rural Business Development Programs,"
Staff Papers
11572, Michigan State University, Department of Agricultural, Food, and Resource Economics.
- Stamoulis, Kostas G. & Pingali, Prabhu L. & Reardon, Thomas, 2006. "Impacts of Agrifood Market Transformation during Globalization on the Poor's Rural Nonfarm Employment: Lessons for Rural Business Development Programs," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25556, International Association of Agricultural Economists.
- Ihle, Rico & von Cramon-Taubadel, Stephan, 2008. "A Comparison of Threshold Cointegration and Markov-Switching Vector Error Correction Models in Price Transmission Analysis," 2008 Conference, April 21-22, 2008, St. Louis, Missouri 37603, NCCC-134 Conference on Applied Commodity Price Analysis, Forecasting, and Market Risk Management.
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