The influence of the sector is pervasive and its impact is substantial. Yet, relatively little is known about the impact of the Bank's transport interventions on the welfare of the poor. Traditionally, most transport operations have been advanced on efficiency and economic growth grounds. If transport interventions are to be more effective in poverty reduction more knowledge is necessary about the transport linkages, barriers, and secondary effects that impinge upon the poor. Given the extensive nature of transport, a key issue is how and where to set priorities for interventions -within the sector and across sectors.
Transport is an intermediate service - a means to an end.
It may be that the first and second round effects of a transport intervention represent a majority of its total impact. In the final analysis the impact on the poor will depend on the specific transport conditions associated with the location and travel needs of the poor, i.e. on the micro level, although the magnitude will stem from the transmission from the original transport intervention and its final incidence. Nevertheless, in general, in as much as transport improvements lower transaction costs, provided markets are reasonably competitive, these improvements will be registered as lower prices of inputs and products. Moreover, not all general transport effects are positive - externalities such as congestion and air pollution also impact on the poor and it is important to identify whether such impacts have a regressive bias. A key question is how to establish priorities for areas to examine and methodologies to adopt.