Rural Roads, Poverty, and Resilience: Evidence from Ethiopia

27 Pages Posted: 3 Apr 2019

See all articles by Shohei Nakamura

Shohei Nakamura

World Bank; World Bank

Tom Bundervoet

Vrije Universiteit Brussel (VUB) - MOSI

Mohammed Nuru

World Bank

Date Written: April 1, 2019

Abstract

This study analyzes the impacts of the recent rural road development in Ethiopia on welfare and economic outcomes. The identification of the impacts relies on a difference-in-differences matching approach, taking advantage of the nationally representative household survey and the original road database, both of which are panel data spanning between 2012 and 2016. The results of the econometric analysis overall suggest that Ethiopia's recent rural road development has substantially increased household welfare and supported households in coping with the recent severe droughts. This study estimates that rural roads increased, on average, household consumption by 16.1 percent between 2012 and 2016 (or 3.8 percent per year). The effects of rural road development were largest in the most remote communities, as it increased household consumption by 27.9 percent. Furthermore, in the communities most affected by the El Ni?o drought, the likelihood of falling into poverty was 14.4 percent lower between 2012 and 2016 if the community was connected by a rural road. Taken together, the results suggest that, by connecting remote communities to markets, rural roads have substantially increased the welfare and resilience of rural households in shock-prone environments.

Keywords: Rural Roads & Transport, Inequality, Natural Disasters, Transport Services, Climate Change and Agriculture, Crops and Crop Management Systems

Suggested Citation

Nakamura, Shohei and Bundervoet, Tom and Nuru, Mohammed, Rural Roads, Poverty, and Resilience: Evidence from Ethiopia (April 1, 2019). World Bank Policy Research Working Paper No. 8800, Available at SSRN: https://ssrn.com/abstract=3363984

Shohei Nakamura (Contact Author)

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Tom Bundervoet

Vrije Universiteit Brussel (VUB) - MOSI

Brussels
Belgium

Mohammed Nuru

World Bank

1818 H Street, NW
Washington, DC 20433
United States

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