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How Infrastructure and Financial Institutions Affect Rural Income and Poverty: Evidence from Bangladesh

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  • Shahidur Khandker
  • Gayatri Koolwal

Abstract

The mechanisms by which the poor benefit from economic growth remain a topic of debate in development literature. We address this issue in the context of rural Bangladesh, using a pooled dataset of three household panels between 1991-2001. Expansion of irrigation, paved roads, electricity, and access to formal and informal credit have (through different veins) led to higher rural farm and non-farm incomes, accounting for exogenous local agroclimatic endowments that explain a large part of the variation in the growth of infrastructure and credit programmes. However, this has not translated into substantial reductions in poverty for the poorest households.

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  • Shahidur Khandker & Gayatri Koolwal, 2010. "How Infrastructure and Financial Institutions Affect Rural Income and Poverty: Evidence from Bangladesh," Journal of Development Studies, Taylor & Francis Journals, vol. 46(6), pages 1109-1137.
    • Handle: RePEc:taf:jdevst:v:46:y:2010:i:6:p:1109-1137
    DOI: 10.1080/00220380903108330
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    References listed on IDEAS

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    1. World Bank, 2003. "Bangladesh - Development Policy Review : Impressive Achievements but Continuing Challenges," World Bank Publications - Reports 14669, The World Bank Group.
    2. World Bank, 2002. "Poverty in Bangladesh : Building on Progress," World Bank Publications - Reports 15303, The World Bank Group.
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    Cited by:

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    3. Paul Chinowsky & Amy Schweikert & Niko Strzepek & Kyle Manahan & Kenneth Strzepek & C. Schlosser, 2013. "Climate change adaptation advantage for African road infrastructure," Climatic Change, Springer, vol. 117(1), pages 345-361, March.
    4. Calderon, Cesar & Serven, Luis, 2014. "Infrastructure, growth, and inequality : an overview," Policy Research Working Paper Series 7034, The World Bank.
    5. Monica Beuran & Marie Gachassin & Gaël Raballand, 2015. "Are There Myths on Road Impact and Transport in Sub-Saharan Africa?," Development Policy Review, Overseas Development Institute, vol. 33(5), pages 673-700, September.
    6. Shahidur R. Khandker & Gayatri B. Koolwal, 2016. "How has microcredit supported agriculture? Evidence using panel data from Bangladesh," Agricultural Economics, International Association of Agricultural Economists, vol. 47(2), pages 157-168, March.
    7. Khandker, Shahidur R. & Samad, Hussain A., 2016. "Transformation of Rural Bangladesh: Role of Infrastructure and Financial Institutions," Working Papers 128, JICA Research Institute.
    8. Jacqueline Doremus, 2017. "Unintended Impacts: How roads change health and nutrition for ethnic minorities in Congo," Working Papers 1702, California Polytechnic State University, Department of Economics.
    9. Lawrence Sáez, 2013. "Methods in governance research: a review of research approaches," Global Development Institute Working Paper Series esid-017-13, GDI, The University of Manchester.
    10. Muhammad Akbar & Abdullah & Amjad Naveed & Shabib Haider Syed, 2022. "Does an Improvement in Rural Infrastructure Contribute to Alleviate Poverty in Pakistan? A Spatial Econometric Analysis," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 162(1), pages 475-499, July.
    11. David Carment & Yiagadeesen Samy, 2017. "Exiting the fragility trap: Rethinking our approach to the world's most fragile states," WIDER Working Paper Series wp-2017-181, World Institute for Development Economic Research (UNU-WIDER).
    12. Alastaire Sèna ALINSATO, 2015. "Globalization, Poverty And Role Of Infrastructures," Journal of Economics and Political Economy, KSP Journals, vol. 2(1s), pages 197-212, May.
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    14. Amuakwa-Mensah, Salome & Surry, Yves, 2022. "Association between rural electrification and agricultural output: Evidence from Sub-Saharan Africa," World Development Perspectives, Elsevier, vol. 25(C).
    15. Doremus, Jacqueline, 2019. "Unintended impacts from forest certification: Evidence from indigenous Aka households in Congo," Ecological Economics, Elsevier, vol. 166(C), pages 1-1.
    16. Gibson John & Rioja Felix, 2020. "The welfare effects of infrastructure investment in a heterogeneous agents economy," The B.E. Journal of Macroeconomics, De Gruyter, vol. 20(1), pages 1-17, January.
    17. Zhihua Chen, 2023. "The Impact of the Belt and Road Infrastructure Development on the Economic Growth of the Partner Countries," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 15(2), pages 254-272, May.
    18. Traverso, Silvio, 2016. "How to escape from a poverty trap: The case of Bangladesh," World Development Perspectives, Elsevier, vol. 4(C), pages 48-59.
    19. Paul Fenton Villar & Tomasz Kozakiewicz & Vinitha Bachina & Sarah Young & Shannon Shisler, 2023. "PROTOCOL: The effects of agricultural output market access interventions on agricultural, socio‐economic and food and nutrition security outcomes in low‐ and middle‐income countries: A systematic revi," Campbell Systematic Reviews, John Wiley & Sons, vol. 19(3), September.
    20. Martin Wiegand & Eric Koomen & Menno Pradhan & Christopher Edmonds, 2023. "The Impact of Road Development on Household Welfare in Rural Papua New Guinea," Journal of Development Studies, Taylor & Francis Journals, vol. 59(6), pages 933-953, June.
    21. Miyazaki, Suguru & Shimamura, Yasuharu, 2014. "Risk, Infrastructure, and Rural Market Integration: Implications of Infrastructure Provision for Food Markets and Household Consumption in Rural Indonesia," Working Papers 81, JICA Research Institute.
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