Estimating the long-term impacts of rural roads : a dynamic panel approach
AbstractInfrastructure investments are typically long-term. As a result, observed benefits to households and communities may vary considerably over time as short-term outcomes generate or are subsumed by longer-term impacts. This paper uses a new round of household survey as part of a local government engineering department's rural road improvement project financed by the World Bank in Bangladesh to compare the short-term and long-term effects of rural roads over eight years. A dynamic panel model, estimated by generalized method of moments, is applied to estimate the varying returns to public road investment accounting for time-varying unobserved characteristics. The results show that the substantial effects of roads on such outcomes as per capita expenditure, schooling, and prices as observed in the short run attenuate over time. But the declining returns are not common for all outcomes of interest or all households. Employment in the rural non-farm sector, for example, has risen more rapidly over time, indicating increasing returns to investment. The very poor have failed to sustain the short-term benefits of roads, and yet the gains accrued to the middle-income groups are strengthened over time because of changing sectors of employment, away from agriculture toward non-farm activity. The results also show that initial state dependence -- or initial community and household characteristics as well as road quality -- matters in estimating the trajectory of road impacts.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by The World Bank in its series Policy Research Working Paper Series with number 5867.
Date of creation: 01 Oct 2011
Date of revision:
Transport Economics Policy&Planning; Housing&Human Habitats; Economic Theory&Research; Rural Poverty Reduction; Rural Roads&Transport;
This paper has been announced in the following NEP Reports:
- NEP-AGR-2011-11-14 (Agricultural Economics)
- NEP-ALL-2011-11-14 (All new papers)
- NEP-DEV-2011-11-14 (Development)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Shahidur R. Khandker & Zaid Bakht & Gayatri B. Koolwal, 2009.
"The Poverty Impact of Rural Roads: Evidence from Bangladesh,"
Economic Development and Cultural Change,
University of Chicago Press, vol. 57(4), pages 685-722, 07.
- Khandker, Shahidur R. & Bakht, Zaid & Koolwal, Gayatri B., 2006. "The poverty impact of rural roads : evidencefrom Bangladesh," Policy Research Working Paper Series 3875, The World Bank.
- Michael Lokshin & Ruslan Yemtsov, 2005. "Has Rural Infrastructure Rehabilitation in Georgia Helped the Poor?," World Bank Economic Review, World Bank Group, World Bank Group, vol. 19(2), pages 311-333.
- Ren Mu & Dominique van de Walle, 2011. "Rural Roads and Local Market Development in Vietnam," Journal of Development Studies, Taylor & Francis Journals, Taylor & Francis Journals, vol. 47(5), pages 709-734.
- Binswanger, Hans P. & Khandker, Shahidur R. & Rosenzweig, Mark R., 1993.
"How infrastructure and financial institutions affect agricultural output and investment in India,"
Journal of Development Economics, Elsevier,
Elsevier, vol. 41(2), pages 337-366, August.
- Binswanger, Hans P. & Khandker, Shahidur R & Rosenzweig, Mark R., 1989. "How infrastructure and financial institutions affect agricultural output and investment in India," Policy Research Working Paper Series 163, The World Bank.
- Jacoby, Hanan G. & Minten, Bart, 2009.
"On measuring the benefits of lower transport costs,"
Journal of Development Economics, Elsevier,
Elsevier, vol. 89(1), pages 28-38, May.
- Jacoby, Hanan G. & Minten, Bart, 2008. "On measuring the benefits of lower transport costs," Policy Research Working Paper Series 4484, The World Bank.
- Shenggen Fan & Peter Hazell & Sukhadeo Thorat, 2000. "Government Spending, Growth and Poverty in Rural India," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, Agricultural and Applied Economics Association, vol. 82(4), pages 1038-1051.
- Narayana, N. S. S. & Parikh, Kirit S. & Srinivasan, T. N., 1988. "Rural works programs in India: Costs and benefits," Journal of Development Economics, Elsevier, Elsevier, vol. 29(2), pages 131-156, September.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roula I. Yazigi).
If references are entirely missing, you can add them using this form.