Are returns to public investment lower in less-favored rural areas?: an empirical analysis of India
Developing countries allocate scarce government funds to investments in rural areas to achieve the twin goals of agricultural growth and poverty alleviation. Choices have to be made between different types of investments, especially infrastructure, human capital and agricultural research, and between different types of agricultural regions, e.g., irrigated and high- and low-potential rainfed areas. This paper develops an econometric approach and provides empirical evidence on the impact of government investments in rural India using district-level data. While irrigated areas played a key role in agricultural growth during the Green Revolution era, our results show that it is now the rainfed areas, including many less-favored areas that offer the most growth for an additional unit of investment. Moreover, investments in rainfed areas have a much larger impact on poverty alleviation, making this a win-win development strategy. These results have important policy implications, and challenge conventional thinking that public investments in rural India should always be targeted to irrigated and other high-potential areas.
|Date of creation:||1999|
|Date of revision:|
|Contact details of provider:|| Postal: 2033 K Street, NW, Washington, DC 20006|
Web page: http://www.ifpri.org/
More information through EDIRC
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.:
- Diewert, W. E., 1976. "Exact and superlative index numbers," Journal of Econometrics, Elsevier, vol. 4(2), pages 115-145, May.
- Datt, Gaurav & Ravallion, Martin, 1997. "Why have some Indian states performed better than others at reducing rural poverty?," FCND discussion papers 26, International Food Policy Research Institute (IFPRI).
- Scherr, Sara J. & Hazell, P. B. R., 1994. "Sustainable agricultural development strategies in fragile lands:," EPTD discussion papers 1, International Food Policy Research Institute (IFPRI).
- Datt, Gaurav & Ravallion, Martin, 1998.
"Farm productivity and rural poverty in India,"
FCND discussion papers
42, International Food Policy Research Institute (IFPRI).
- Mark Rosenzweig & Andrew D. Foster, .
"Technical Change and Human Capital Returns and Investments: Evidence from the Green Revolution,"
_065, University of Pennsylvania.
- Foster, Andrew D & Rosenzweig, Mark R, 1996. "Technical Change and Human-Capital Returns and Investments: Evidence from the Green Revolution," American Economic Review, American Economic Association, vol. 86(4), pages 931-53, September.
- Trudy Owens & John Hoddinott, 1999.
"Investing in development or investing in relief: Quantifying the poverty tradeoffs using Zimbabwe household panel data,"
CSAE Working Paper Series
1999-04, Centre for the Study of African Economies, University of Oxford.
- Trudy Owens & John Hoddinott, 1998. "Investing in development or investing in relief: quantifying the poverty tradeoffs using Zimbabwe household panel data," Economics Series Working Papers WPS/1999-04, University of Oxford, Department of Economics.
- Mukhopadhyay, Sudhin K, 1994. "Adapting Household Behavior to Agricultural Technology in West Bengal, India: Wage Labor, Fertility, and Child Schooling Determinants," Economic Development and Cultural Change, University of Chicago Press, vol. 43(1), pages 91-115, October.
- Ghose, A K, 1989. "Rural Poverty and Relative Prices in India," Cambridge Journal of Economics, Oxford University Press, vol. 13(2), pages 307-31, June.
- 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, 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.
- Lau, Lawrence J, 1979. "On Exact Index Numbers," The Review of Economics and Statistics, MIT Press, vol. 61(1), pages 73-82, February.
- 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, vol. 82(4), pages 1038-1051.
- Ravallion, Martin & Datt, Gaurav, 1995. "Growth and poverty in rural India," Policy Research Working Paper Series 1405, The World Bank.
- Bell, Clive & Rich, Robert, 1994. "Rural Poverty and Aggregate Agricultural Performance in Post-independence India," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 56(2), pages 111-33, May.
When requesting a correction, please mention this item's handle: RePEc:fpr:eptddp:43. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.