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In conflict-prone situations, access to markets is necessary to restore economic growth and generate the preconditions for peace and reconstruction. Hence, the rehabilitation of damaged transport infrastructure has emerged as an overarching investment priority among donors and governments. This paper brings together two distinct strands of literature on the effects of conflict on welfare and on the economic impact of transport infrastructure. The theoretical model explores how transport infrastructure affects conflict incidence and welfare when selection into rebel groups is endogenous. The implications of the model are tested with data from the Democratic Republic of Congo. The analysis addresses the problems of the endogeneity of transport costs and conflict using a novel set of instrumental variables. For transport costs, a new instrument is developed, the "natural-historical path," which measures the most efficient travel route to a market, taking into account topography, land cover, and historical caravan routes. Recognizing the imprecision in measuring the geographic impacts of conflict, the analysis develops a spatial kernel density function to proxy for the incidence of conflict. To account for its endogeneity, it is instrumented with ethnic fractionalization and distance to the eastern border. A variety of indicators of well-being are used: a wealth index, a poverty index, and local gross domestic product. The results suggest that, in most situations, reducing transport costs has the expected beneficial impacts on all the measures of welfare. However, when there is intense conflict, improvements in infrastructure may not have the anticipated benefits. The results suggest the need for more nuanced strategies that take into account varying circumstances and consider actions that jointly target governance with construction activities.

Armed Conflict --- Conflict --- Conflict and Development --- Drc --- Economic Theory & Research --- Ethnic Fractionalization --- Kernel Density --- Macroeconomics and Economic Growth --- Natural Historical Path --- Nightlight Data --- Post Conflict Reconstruction --- Poverty Reduction --- Rural Poverty Reduction --- Transport --- Transport Economics Policy & Planning

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This paper applies an econometric analysis to estimate the average and distribution benefits of rural electrification using rich household survey data from India. The results support that rural electrification helps to reduce time allocated to fuelwood collection by household members and increases time allocated to studying by boys and girls. Rural electrification also increases the labor supply of men and women, schooling of boys and girls, and household per capita income and expenditure. Electrification also helps reduce poverty. But the larger share of benefits accrues to wealthier rural households, with poorer ones having more limited use of electricity. The analysis also shows that restricted supply of electricity, due to frequent power outages, negatively affects both household electricity connection and its consumption, thereby reducing the expected benefits of rural electrification.

Agriculture --- Distributional Impacts of Electrification --- Electric Power --- Energy and Poverty Alleviation --- Energy Production and Transportation --- Engineering --- Rural Development --- Rural Electrification Impacts --- Rural Poverty Reduction --- Rural India

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In conflict-prone situations, access to markets is necessary to restore economic growth and generate the preconditions for peace and reconstruction. Hence, the rehabilitation of damaged transport infrastructure has emerged as an overarching investment priority among donors and governments. This paper brings together two distinct strands of literature on the effects of conflict on welfare and on the economic impact of transport infrastructure. The theoretical model explores how transport infrastructure affects conflict incidence and welfare when selection into rebel groups is endogenous. The implications of the model are tested with data from the Democratic Republic of Congo. The analysis addresses the problems of the endogeneity of transport costs and conflict using a novel set of instrumental variables. For transport costs, a new instrument is developed, the "natural-historical path," which measures the most efficient travel route to a market, taking into account topography, land cover, and historical caravan routes. Recognizing the imprecision in measuring the geographic impacts of conflict, the analysis develops a spatial kernel density function to proxy for the incidence of conflict. To account for its endogeneity, it is instrumented with ethnic fractionalization and distance to the eastern border. A variety of indicators of well-being are used: a wealth index, a poverty index, and local gross domestic product. The results suggest that, in most situations, reducing transport costs has the expected beneficial impacts on all the measures of welfare. However, when there is intense conflict, improvements in infrastructure may not have the anticipated benefits. The results suggest the need for more nuanced strategies that take into account varying circumstances and consider actions that jointly target governance with construction activities.

Armed Conflict --- Conflict --- Conflict and Development --- Drc --- Economic Theory & Research --- Ethnic Fractionalization --- Kernel Density --- Macroeconomics and Economic Growth --- Natural Historical Path --- Nightlight Data --- Post Conflict Reconstruction --- Poverty Reduction --- Rural Poverty Reduction --- Transport --- Transport Economics Policy & Planning

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Transport infrastructure is deemed to be central to development and consumes a large fraction of the development assistance envelope. Yet there is debate about the economic impact of road projects. This paper proposes an approach to assess the differential development impacts of alternative road construction and prioritize various proposals, using Nigeria as a case study. Recognizing that there is no perfect measure of economic well-being, a variety of outcome metrics are used, including crop revenue, livestock revenue, non-agricultural income, the probability of being multi-dimensionally poor, and local gross domestic product for Nigeria. Although the measure of transport is the most accurate possible, it is still endogenous because of the nonrandom placement of road infrastructure. This endogeneity is addressed using a seemingly novel instrumental variable termed the natural path: the time it would take to walk along the most logical route connecting two points without taking into account other, bias-causing economic benefits. Further, the analysis considers the potential endogeneity from nonrandom placement of households and markets through carefully chosen control variables. It finds that reducing transportation costs in Nigeria will increase crop revenue, non-agricultural income, the wealth index, and local gross domestic product. Livestock sales increase as well, although this finding is less robust. The probability of being multi-dimensionally poor will decrease. The results also cast light on income diversification and structural changes that may arise. These findings are robust to relaxing the exclusion restriction. The paper also demonstrates how to prioritize alternative road programs by comparing the expected development impacts of alternative New Partnership for Africa's Development projects.

Agriculture --- Banks and Banking Reform --- Development --- Economic Theory & Research --- Finance and Financial Sector Development --- Macroeconomics and Economic Growth --- Mpi --- Multi-Dimensional Poverty Index --- Nepad --- Roads --- Roads and Highways Performance --- Rural Development --- Rural Roads & Transport --- Transport --- Transport Economics Policy & Planning

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Despite the development focus on transportation, methodologies for evaluating which road projects to fund are often dis-jointed and unreliable. This report hopes to improve upon the current approaches by establishing a new methodology for prioritization which can be applied to a diverse set of scenarios, regions, and projects. This book demonstrates how modern econometrics and geospatial techniques can be combined to analyze the latest available geo-referenced datasets at the smallest possible scale to answer some of the most important questions in development. Uniquely this report attempts to shed light on some of the most profound puzzles in determining the impacts of roads and where to locate these. Does road infrastructure unleash a virtuous growth cycle? Is it advisable to improve roads in conflict prone zones? What is the effect of improving market access on farming practices? And what are the impacts of roads on forests and biodiversity? It is envisioned that the approach used in this book can be a reference guide to researchers from across the spectrum of international development, who are seeking new tools and insights into the many issues (technical and non-technical) of this important field.

Roads --- Transportation, Automotive --- Economic aspects --- Africa.