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Estimating the impact of rural investments in Nepal

Author

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

Abstract

As a largely rural society, most people in Nepal still depend upon agriculture as their major livelihood strategy. Therefore, it is important to improve the allocation efficiency of limited public expenditures to promote agricultural growth and poverty reduction. However, evaluating the returns of public investment is limited by methodological challenges. We use hedonic and panel data methods to examine the returns to different types of rural public investments including roads, irrigation and extension advice. The use of diverse identification strategies reduces the risk of using a narrower set of results driven primarily by a particular methodology. We find that rural roads and irrigation are one of the most productive public expenditures according to the benefit-cost ratio calculations, though the magnitudes of these ratios depend on methodology.

Suggested Citation

  • Dillon, Andrew & Sharma, Manohar & Zhang, Xiaobo, 2011. "Estimating the impact of rural investments in Nepal," Food Policy, Elsevier, vol. 36(2), pages 250-258, April.
  • Handle: RePEc:eee:jfpoli:v:36:y:2011:i:2:p:250-258
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    References listed on IDEAS

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    1. 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.
    2. Tewodaj Mogues, 2011. "The Bang for the Birr: Public Expenditures and Rural Welfare in Ethiopia," Journal of Development Studies, Taylor & Francis Journals, vol. 47(5), pages 735-752.
    3. S. Mansoob Murshed & Scott Gates, 2005. "Spatial-Horizontal Inequality and the Maoist Insurgency in Nepal," Review of Development Economics, Wiley Blackwell, vol. 9(1), pages 121-134, February.
    4. 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).
    5. Jacoby, Hanan C, 2000. "Access to Markets and the Benefits of Rural Roads," Economic Journal, Royal Economic Society, vol. 110(465), pages 713-737, July.
    6. Jimenez, Emmanuel, 1995. "Human and physical infrastructure: Public investment and pricing policies in developing countries," Handbook of Development Economics,in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 3, chapter 43, pages 2773-2843 Elsevier.
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    Citations

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    Cited by:

    1. Hiroyuki Takeshima, 2017. "Overview of the Evolution of Agricultural Mechanization in Nepal: A Focus on Tractors and Combine Harvesters," Working Papers id:11906, eSocialSciences.
    2. Barbier, Edward B., 2016. "Is green growth relevant for poor economies?," Resource and Energy Economics, Elsevier, vol. 45(C), pages 178-191.
    3. Lindy Charlery & Martin R. Nielsen & Henrik Meilby & Carsten Smith-Hall, 2016. "Effects of New Roads on Environmental Resource Use in the Central Himalaya," Sustainability, MDPI, Open Access Journal, vol. 8(4), pages 1-20, April.
    4. Bridge, Brandon A. & Adhikari, Dadhi & Fontenla, Matías, 2016. "Household-level effects of electricity on income," Energy Economics, Elsevier, vol. 58(C), pages 222-228.
    5. Barbier, Edward B., 2013. "Structural change, dualism and economic development : the role of the vulnerable poor on marginal lands," Policy Research Working Paper Series 6456, The World Bank.
    6. Aradom Gebrekidan Abbay & Roel Rutten, 2016. "Does spatial proximity to small towns matter for rural livelihoods? A propensity score matching analysis in Ethiopia," Letters in Spatial and Resource Sciences, Springer, vol. 9(3), pages 287-307, October.
    7. Joshi, Janak & Ali, Mohammad & Berrens, Robert P., 2017. "Valuing farm access to irrigation in Nepal: A hedonic pricing model," Agricultural Water Management, Elsevier, vol. 181(C), pages 35-46.
    8. Arndt, Channing & Strzepek, Kenneth & Thurlow, James, 2011. "Climate Change and Infrastructure Investment in Developing Countries: The Case of Mozambique," WIDER Working Paper Series 092, World Institute for Development Economic Research (UNU-WIDER).
    9. Elodie Djemai, 2017. "Roads and the Spread of AIDS in Africa," Working Papers DT/2017/16, DIAL (Développement, Institutions et Mondialisation).
    10. repec:gam:jsusta:v:8:y:2016:i:4:p:363:d:68149 is not listed on IDEAS
    11. Barbier, Edward B., 2012. "Natural capital, ecological scarcity and rural poverty," Policy Research Working Paper Series 6232, The World Bank.

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