rafmacalaba/datause-encoder-data huggingface dataset:
# **The Poverty Impact of Rural Roads: Evidence from Bangladesh**

## **1. Introduction**

Improved roads and infrastructure can create opportunities for economic growth and poverty reduction through a range of mechanisms. Roads reduce transportation costs and the costs of consumption and production of goods and services (BIDS 2004). With easier access to markets and technology, improved roads expand farm and nonfarm production through increased availability of relevant inputs and lower input costs (Binswanger, Khandker, and Rosenzweig 1993; BIDS 2004; Levy 1996) as well as growth in rural enterprises (Lokshin and Yemtsov 2005). At the household level, road development contributes to higher productivity and demand for labor (Leinbach 1983; World Bank 2000), and improved education and health, including for women and girls (Bryceson and Howe 1993; Levy 1996). Road-related studies have also suggested that household consumption is likely to get a boost from increased household income, consequently reducing poverty (BIDS 2004; Fan, Hazell, and Thorat 2000).

It has been difficult to precisely quantify the benefits of roads, due to methodological constraints and data limitations. While transport investments have consistently represented 15-20 percent of the World Bank’s lending portfolio<sup>2</sup> , traditional estimates of the returns to such investments using the internal rate of return approach are generally so low that the investments do not appear viable. Such approaches have also been criticized for not being able to capture the true distributional benefits to the targeted population, particularly for the poor (van de Walle, 2002). Additional mechanisms also depend on the type of road improvement project.<sup>3</sup> These problems are compounded by the fact that the effects of rural roads are also long-term and thus cannot be captured through the use of cross-sectional data, particularly since unobserved fixed area characteristics influence the placement of road investment in a village or community (Binswanger, Khandker and Rosenzweig, 1993).

Since the timeline for the full impact of road improvements to take effect is extremely long, panel data as well as careful selection of control areas are essential in examining the exact impact of road

> 2 Indeed, transport expenditure shares have remained fairly constant in this range between 1999 and 2004.  Within South Asia, this share jumps to 26% of the Bank’s lending in that region, as compared to 27% for East Asia and the Pacific, 21% for African countries, 14% for Latin America and the Caribbean, 7% for Middle East and North Africa, and 5% for Europe and Central Asia.

> 3 Such projects, for example, can range from paving dirt roads to facilitation of two-way traffic, straightening, or upgrade to dual carriageway or motorway status.

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# CONTENTS

Preface

- I. Introduction

- II. Scope and Methodology of the Study

- III. Empirical Results: Traasport Profiles for Car:bbean Countries IV. Summary and Conclusions

- Annex 1 Evidence on the Relative Difference Between Caribbean Ocean Freight Rates for Major Commodity Exports and those of Other Developing Countries

- Annex 2 A Note on the Incidence of International Transport Costs on Exporters and Importers

- Appendix Detailed Statistics on the Transport Costs for Caribbean Countries' Exports to the United States
that, when a country offers free access to another in a sector where it applies a 10% multilateral tariff, the country would tend to subsequently reduce that external tariff by over two percentage points.<sup>12</sup> The main difficulty in such studies is to establish causality. For example, it may be that some products are easier to liberalize than others, and trade in those products tends to be liberalized both regionally and multilaterally. In addition to a large set of fixed effects, Estevadeordal et al. (2008) use distinct strategies to determine causality. First, they look for differential effects in FTAs and CUs. This is possible in their dataset because it includes both Mercosur and the Andean Pact,<sup>13</sup> which functioned as FTAs in the first part of the sample but switched to being CUs in 1995. If the relationship between preferential and multilateral tariffs simply reflected country-industry specific shocks driving liberalization on all fronts, there would be no reason for those shocks to operate distinctly in different types of agreements. The authors find that tariff complementarity is observed only in FTAs; in CUs internal liberalization is not associated with any statistically significant change in external tariffs. Second, Estevadeordal et al. assess whether there are differential effects in sectors where the potential for trade diversion is large. They find that the complementarity effect is indeed stronger in sectors where trade bloc partners are more important suppliers, where trade discrimination would be more disrupting. Moreover, they find that the complementarity effect is restricted to sectors where the preferential margin is non-trivial (above 2.5 percentage points). As we discuss in subsection 5.1, complying

> 12 Estevadeordal et al. (2008) also study whether binding tariffs at the WTO matter for the effects of RTAs on external tariffs. They find that external tariffs tend to fall by more in constrained sectors (only two percent of the sectors in their sample), especially if they have experienced preferential liberalization. This suggests that FTAs are more effective in bringing external tariffs down precisely in the sectors where multilateral agreements have been most successful in constraining tariffs.

> 13 During the period studied, the Andean Pact was composed of Bolivia, Colombia, Ecuador, Peru and Venezuela.

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Nabeshima, eds. China Urbanizes: Consequences, Strategies, and Policies (Washington, D.C.: The World Bank), 2008.

Rama, M, Beteille, T, Y. Li, P. Mitra, J. Newman (2014), _Addressing Inequality in South Asia_ , World Bank, Washington DC.

Ravallion, Martin and Shaohua Chen (1999). When Economic Reform Is Faster Than Statistical Reform: Measuring and Explaining Income Inequality in Rural China, Oxford Bulletin of Economics and Statistics v61, n1 (February 1999): 33-56 Rigobon, Roberto (2003) ”Identification Through Heteroskedasticity”, The Review of Economics and Statistics, 85(4): 777-792.

Rozelle, Scott. 1994. Rural Industrialization and Increasing Inequality: Emerging Patterns in China’s Reforming Economy. Journal of Comparative Economics, Vol. 19, Iss. 3, pp. 362-391 Sato, Hiroshi and Shi Li. 2007, Class origin, family culture, and intergenerational correlation of education in rural China. IZA Discussion Paper series No. 2642, Institute for the Study of Labor (IZA), Bonn, Germany.

Shakeshaft, NG, Trzaskowski, M, Mcmillan, A, Rimfeld, K, Krapohl, E, Haworth, CMA, Dale, PS, Plomin, R (2013), “Strong Genetic Influence on a UK Nationwide Test of Educational Achievement at the End of Compulsory Education at Age 16”, PL o S One , vol 8, no. 12.

Solon, Gary, 1992. “Intergenerational Income Mobility in the United States, American Economic Review, American Economic Association, vol. 82(3), pages 393-408, June.

Solon, G (1999), “Intergenerational Mobility in the Labor Market,” in O. Ashenfelter and D. Card eds Handbook of Labor Economics, Vol 3A, Elsevier Science, North-Holland, Amsterdam.

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# **Introduction**

This paper provides an overview of how various approaches to improving public sector management relate to the so-called core or essential public health functions (EPHFs) such as disease surveillance, health education, monitoring and evaluation, workforce development, enforcement of public health laws and regulations, public health research, and health policy development (IOM 1987; PAHO 2002). Its purpose is to summarize key themes in the public management literature and draw lessons for the EPHFs. Section I summarizes “new public management” approaches. Section II reviews traditional approaches to public administration and their relevance to the EPHFs. Section III summarizes lessons in point form.

Two points are essential to understanding the discussion that follows. The first relates to the economic nature of the EPHFs. In economic terms, most EPHFs are public goods. This means that they are non-rival (i.e., consumption by one person doesn’t preclude consumption by another) and non-exclusionary (i.e., their benefits accrue to the entire population and can’t be restricted to a discrete group). For example: once erected, a health education billboard benefits everyone who views it, no matter how many people do so (i.e., non-rival); and anyone who wants to view it can, given its public location (i.e., non-exclusionary). This is distinct from private goods—e.g., cancer treatment—which, like most commodities, are both rival and exclusionary. Some disease control services fall into a middle category because they have both private _and_ public characteristics. Immunization is one example. While immunization has private benefits for the vaccinated individual, it also has public benefits because of its contribution to herd immunity and the protection of others. The same is true of TB treatment, which benefits the sick individual but also reduces the chances he will infect others—i.e., an external benefit (externality) in addition to the private benefit. These distinctions are not purely academic. They have major implications on how services should be financed and delivered and are fundamental to the discussion below.

The second point relates to the difference between public health services and public health functions. Many traditional public health services—immunization, std clinics, TB control etc.—are merit goods; the public health functions, however—policymaking, disease surveillance, population health assessment, health education etc.—are almost all pure public goods. The service-function distinction is not always made clear in the literature but is of considerable practical relevance when it comes to questions of management and financing. Public health services are often relatively easy to measure, e.g., with indicators such as the number of children immunized or the number of TB cases treated. This makes them easier to manage and provides a wider scope for innovations in service delivery compared to public health functions, whose public good nature of complexity of measurement pose special challenges. As such, the public health 1
2 time-cost basis for certain services (United Kingdom); and (g) negotiated lump-sum per an agreed project-based activity by the extensionist (Queensland, Australia).

Most of the existing studies provide information on the structure and operation of the different paid-extension arrangements, and, in some cases also some anecdotal results on the costs and benefits associated with these operations. However, there is not enough evidence and analysis that can help the reader in reaching a conclusion on the degree of success of certain paid extension arrangements.

The literature includes several studies that address the economic aspects of paid-extension. Hone (1991), in a theoretical analysis attempts to estimate the implications of recent use of direct charges to finance various rural extension networks in Australia. Dinar (1996) applies an approach that determines how much to charge for extension services, using an illustrative example from Israel. Schwartz (1994) reviews several concepts (amended by case study analysis), such as public vs. private goods, information transfer, and externalities, which are associated with paidextension.

However, several questions still remain to be answered. For example, can one arrangement for paid-extension that was successfully experienced in one country be duplicated in another country? How does one select the appropriate paid-extension arrangement for a given set of conditions? These questions suggest that a methodology to compare between different paidextension arrangements, is desirable.' This paper develops a framework for comparing the cost and several performance indicators of various paid-extension programs by using actual data from two types of paid-extension programs in Nicaragua, and assessing their performance.<sup>2</sup> The analysis focuses on selected performance indicators and their application using available data from the experience in Nicaragua. The next section develops a framework for comparison between the two types of paid-extension.

> The debate on public vs. private extension continues to rage among experts in the field. The debate includes issues such as should extension be publicly funded? Who should pay and how much should be paid for extension services, and which segments in the farming population can afford to pay for extension? (See Cary, 1993; Schwartz, 1994; and Rivera, 1996a,b). Although significant, this debate is beyond the scope of this paper.

> 2The purpose of this paper is not to evaluate the paid-extension performance in Nicaragua but rather to illustrate, using available data from Nicaragua, the application of the indicators developed in the paper.
# **_China 1880_**

|Social group|Population<br>(in 000)|Percentage<br>of<br>population|Total<br>income<br>(in taels)|Income as a<br>share of total<br>income (%)|Income per<br>capita<br>(in_taels_per<br>annum)|Income in<br>terms of per<br>capita mean|
|---|---|---|---|---|---|---|
|Commoners|370000|98.0|1821047|74.4|4.92|0.76|
|Upper gentry|1050|0.3|380120|15.5|362.0|55.7|
|Lower gentry|6450|1.7|247605|10.1|38.4|5.91|
|Gentry|7500|2.0|627725|25.6|83.7|12.9|
|_Total_|_377500_|_100_|_2448772_|_100_|_6.5_|_1_|

**Income distribution data.** The calculations are based on Supplement 2 (“The gentry's share in the national product”) from _The Income of the Chinese Gentry_ , by Chung-li Chang, University of Washington Press, Seattle 1962, pp. 326-333.

<u>Gentry per capita incomes. The supplement provides a careful breakdown of</u> gentry incomes by different sources, division of these income sources between upper and lower gentry, and the population shares of both types of gentry (see the table below which is derived from Chang’s Supplement 2). The rest of the book gives the data on Chinese GDP and taxes from which one can calculate total household disposable income, and when combining this information with the estimates of gentry total income and its share in the Chinese population, calculate gentry’s (upper’s and lower’s) per capita incomes (see the last line in the table below).

Main sources of gentry income, according to Chang, are: (i) Government office-holding (administration) which was confined to gentry only. Income from government jobs provided resources for purchase of land and thus income from landownership. Land was a much less important source of income than at a similar stage in European history.

(ii) Gentry service in local affairs (managerial income); basically local administration.

(iii) Assistants to officials (secretarial services).

(iv) Teaching. Unlike the first three, they are private services. Only higher education (teaching) was monopolized by the gentry.

(v) Other services include medicine, writing etc. They are of much smaller importance.

In professions (i) to (iii) actual incomes (as calculated by Chang) were several times larger than the official wages. It was a policy to keep official wages low and give large premiums (the _yang-lien_ allowance, see Chang p.13).

<u>Commoners’ per capita incomes.</u> Once gentry per capita incomes are derived, commoners’ incomes are obtained as the residual (using total household disposable income, line _d_ in Table below, minus gentry’s total income, and dividing by commoners’ total population). The estimated commoners’ per capita income of 4.92 taels should be 47
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country to country. Some laws are very<sup>detailed regardingwhatinformationmay bekept secret</sup> and under what circumstances and some are<sup>quite general. 9</sup> Regulations and laws governing access<sup>toinformationandtheabilityofpeopleto</sup> disseminate information freely may be<sup>coveredinother relatedlaws as well.Pressandmedia</sup> laws may determrine how much information<sup>iscirculated.Restrictive practicessuchasrequiring</sup> journalists or newspapers to be licensed<sup>by thestate maylimit theflow of information, either by</sup> restricting entry or by inducing media personnel<sup>tocensor information disseminationfor fear of</sup> reprisal from government. These restrictions<sup>alsovaryin kindandscopebetweencountries.In</sup> Austria there is no requirement on journalists<sup>ornewspaperstobelicensed.' 0IntheCzech</sup> Republic journalists are not required to<sup>be licensedor accreditedbutnewspapersare requiredto</sup> be licensed. However, an amended Press Law in<sup>1990haschangedtheformer licensing</sup> requirements of any publishing activity<sup>intoasimple registration.Allperiodicalpressis</sup> registered with the Ministry of Culture." In Ethiopia, journalists are not required<sup>to be licensed or accredited;however, newspaper</sup> licenses are issued by the Ministry of<sup>InformationandCultureandareannual,beingrenewed</sup> upon payrnent of the prescribed annual<sup>fee.12Thereisafeeof US$1,185forrenewalof a</sup> license; and prospective and existing newspapers<sup>arerequired to maintainbank balancesof US</sup> $1250 as a bond against potential offenses<sup>that journalistsmight commit. Publicationsthat fail to</sup> demonstrate at least this degree of solvency<sup>whenever requiredby theMinistryof Information</sup>

> **9** See Martin and Feldman (2003), Transparency<sup>Internationalwebsite.</sup>

> 10 (http://www.austriaemb.org.au/media.htm<sup>and www.hrcr.orp./safrica/expression/telesystemaustria.htmnl.</sup>

> " Law #81/1966 ("On periodical printings"<sup>regulatesthe publicationsof the press andother mass media.</sup>

> 12 Proclamation 34/1992, Art. 7). According<sup>to the websiteijnet.org/Archive/2001/8/17-10268.html,an editor of the</sup> sports newspaper Kicker, failed to renew<sup>its- licenseand was sentencedto one monthin prison.</sup>

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# Table of Contents

# 1. INTRODUCTION

# 2. ON THE CONSISTENCI OF REFORMS

2.1 Costs and benefits of reforms 2.2 The debate on reform dynamics 2.2.1 Stabilization and liberalization 2.2.2 The order of liberalization: two examples

# 3. HOW EXPECTATIONS AFFECT COSTS AND BENEFITS OF REFORMS

3.1 The role of expec.ations durinb the transition 3.2 Lack of credibility: causes, consequences, remedies 4. CONCLUSIONS ON EXPECTATIONAL ISSUES AND REFORM DYNAMICS

# References

Figures (*) This paper is part of CECMG's research on Reform Transition. It was written while the author was a consultant at the Macroeconomic Adjustment and Growth Division of the World Bank. I gratefully acknowledge the helpful comments of Bela Balassa, Fabrizio Coricelli, Miguel Kiguel, Nissan Liviatan, Klaus Schmidt-Hebbel and Deborah Wetzel on a previous version of this paper.
households, for price increases ranging from of 28.6 to 51.8% across four commodities (De Janvry & Sadoulet, 2009). Given that the households in Mozambique are poorer on average, and the price spike is much higher in this case, the effect of -9% appears to be reasonable.

Negative effects in the rural areas are driven mostly by the impact through maize. This is consistent with the fact that maize forms the highest share of food expenditure and experienced the largest increase in prices relative to other food items. Maize price increases result in a large welfare loss of about 20% in Niassa, Tete, Manica and Inhambane. The effect from cassava tends to dominate in Nampula and Zambezia where it forms a relatively larger share of the food basket. Some positive general welfare gains are seen in the case of rice in many of the rural areas.

Urban areas in many provinces show positive gains from maize price increases, which is rather unexpected. As noted earlier, one of the reasons may be due to possible sampling bias in the AIS data. Since the survey focuses on agricultural households, the sample of urban households may overrepresent those who have agricultural operations. As a result, province-level aggregates maybe discounting urban households which do not farm, and therefore, do not appear in the survey. In the next section we present our preferred set of results, in which IOF-2014/15 households are matched to spatially proximate AIS-2015 households to mitigate the potential sampling problem. This approach also allows us to estimate the welfare incidence at the household rather than at the province level, thereby allowing to examine the movement of households into or out of poverty.

# **4.3 Net-benefit ratios using household level estimates**

To improve the measurement of production ratios, we impute production values to IOF-2014/15 households using data from spatially matched AIS-2015 households. We find for each household in the IOF-2014/15 the nearest neighbors within a radius of 10 km in the AIS-2015.<sup>10</sup> We check the sensitivity of the estimates by varying the radius to 5 km and to 15 km and find that the results remain robust to these changes. Averages of the maize, rice and cassava production quantities for the neighboring households are used to impute production values to households in the IOF2014/15. In the urban areas the production values are imputed only for those households in the IOF-2014/15 that report non-zero auto-consumption values. Households that have zero own-

> 10 The Stata package _geonear_ is used for the spatial matching (Picard, 2012).

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