Choosing Rural Road Investments to Help Reduce Poverty

This paper examines how rural road investment projects should be selected when the specific objective is taken to be poverty reduction. After critically reviewing past and current practices, an attempt is made to develop an operational approach that is grounded in a public economics framework, in which efficiency and equity concerns are inseparable, information is incomplete in important ways, and resources are limited. A key problem addressed is that an important share of the benefits to the poor from rural roads cannot be measured in monetary terms. The document analyses the information constrains for the appraisal and selection of projects and provides an alternative method. The author states that this approach holds the hope of building capacity and is participatory; it extracts local information that may not be readily available to the central government; and it appears to be feasible because it relies on local authorities participating in the appraisal of subprojects. The proposed selection formula aims to identify places where poverty and economic potential are high and access is low. The method is illustrated using data and project experience for Vietnam. Although information is not the main topic, this paper presents a method of generation of information for the evaluation of transport projects.