The Poverty Impact of Rural Roads: Evidence from Bangladesh

By Shahidur R. Khandker, Z. Bakht, Gayatri Koolwal. Economic development and cultural change, 2006

487 citations recorded by the source corpus.

A rationale for public investment in rural roads is that households can better exploit agricultural and nonagricultural opportunities to employ labor and capital more efficiently. Significant knowledge gaps persist, however, as to how opportunities provided by roads actually filter back into household outcomes as well as distributional consequences. This study examines the impacts of two rural road‐paving projects in Bangladesh using a new quasi‐experimental household panel data set surveying project and control villages before and after program implementation. A household panel fixed‐effects methodology controlling for initial area conditions is used to estimate the impact of paved roads on household and individual outcomes and account for potential bias in program placement at the village level. Rural road investments are found to reduce poverty significantly through higher agricultural production, lower input and transportation costs, and higher agricultural output prices at local village markets. Rural road development has also led to higher secondary schooling enrollment for boys and girls, as compared to primary school enrollment. We find that road investments have also benefited the poor, meaning the gains are significant for the poor and in some cases disproportionately higher than for the nonpoor.

Subfields: Economics and Econometrics, Safety Research, Sociology and Political Science

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Citations in the corpus

Infrastructure and Economic Development in Sub-Saharan Africa (2008, background): “For example, rehabilitation of rural roads raises male agricultural wages and aggregate crop indices in poor villages of Bangladesh (Khandker et al. 2006).”
Rural Roads and Local Economic Development (2018, background): “4Most closely related are papers that estimate the impact of rural road programs in Bangladesh (Khandker et al., 2009; Khandker and Koolwal, 2011; Ali, 2011), Ethiopia (Dercon et al., 2009), Indonesia (Gibson and Olivia, 2010), Papua New Guinea (Gibson and Rozelle, 2003) and Vietnam (Mu and van de W”
Transport Policies and Development (2015, background): “In the rural areas of Bangladesh, Khandker et al. (2009) find that improving rural roads leads to higher rates of both boys’ and girls’ enrolment in school.”
Do rural roads create pathways out of poverty? Evidence from India (2018, background): “Roads might alleviate credit constraints by increasing output prices (Khandker et al., 2009), or by increasing the collateral value of land (Gonzalez-Navarro and Quintana-Domeque, 2016; Donaldson and Hornbeck, 2016).”
For Protection and Promotion: The Design and Implementation of Effective Safety Nets (2008, background): “The food may be prepared and eaten on-site—for example, at child feeding centers as in Bangladesh, Indonesia, and Thailand—or provided as a so-called dry ration to take home as in Chile, where food supplements are distributed on a monthly basis through the primary health care system.”
Does Non-farm Income Affect Food Security? Evidence from India (2019, background): “lished that improved road-access in villages are considered to be important pathways to escape poverty (39).”