Road Building in the Amazon

The Amazon basin has long been seen by national governments in South America as a region of low population density but rich in natural resources and is in need of economic integration to support national development. This has influenced the geopolitics of the Amazon and prompted governments and other organizations to promote road building in the region. New or improved roads are key for providing access to natural resources, and highway networks thus link sites of resource extraction to urban markets and ports. There have been arguably two distinct waves of integration initiatives in the Amazon. The first transpired in the 1960s and 1970s and was driven primarily by geopolitical concerns of national governments to secure their borders in remote corners of the basin in order to support integration of the Amazon with other regions within their countries (Goodland & Irwin, 1975). The second wave, since the 1990s, has been impelled by governments and multilateral banks seeking to complement national road networks with cross-border infrastructure in order to facilitate trade among neighboring countries. The second wave is encapsulated under IIRSA, the Initiative for the Integration of Regional Infrastructure in South America (CEPEI, 2002; Dourojeanni, Barandiaran, D Killeen, 2007). Government-led infrastructure projects have in turn stimulated other road building in the Amazon. It is useful to distinguish between “official” (or “primary”) roads built by governments and “unofficial” (or “secondary”) roads constructed by other interest groups (Perz, Overdevest, Arima, Caldas, & Walker, 2007; Perz et al. 2008). These two types of roads differ in various respects, including the geometric forms of their networks in landscapes, as well as their relationships with natural resource exploitation and thus economic outcomes such as local development as well as environmental outcomes such as deforestation. Regardless of the type of road in question, road building in the Amazon (and elsewhere) has been a cause for debate due to the mix of significant positive and negative impacts. Economics literature on infrastructure was stimulated by studies that showed large impacts on economic growth (e.g., Aschauer, 1989). Public sector investments in infrastructure appeared to generate large increases in private investments that expanded employment and per capita GDP. A macroeconomic literature has consequently emerged on infrastructure and its implications for economic growth. The findings have generally been positive and significant, especially in developing countries, including Latin America (Bourguignon & Pleskovic, 2008; Straub, 2008). Positive effects of infrastructure on growth also apply to the rural sector. The macroeconomic literature is complemented by a microeconomic literature on roads and poverty in developing countries. There the emphasis is on making road investments to maximize livelihood benefits and rural poverty reduction (Howe R van deWalle, 2002). Empirical studies show significant poverty reduction near roads, whether via analysis of subnational administrative units (e.g., Demurger, 2001; Fan, Hazell, & Haque, 2000), communities (e.g., Gunasekera, Anderson, & Lakshmanan, 2008; Pender, Jagger, Nkonya, & Sserunkuuma, 2004), or households (e.g., Gibson & Rozelle, 2003; Jacoby, 2000).