Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

The Role of Infrastructure in Mitigating Poverty Dynamics: The Case of an Irrigation Project in Sri Lanka

The Role of Infrastructure in Mitigating Poverty Dynamics: The Case of an Irrigation Project in... Abstract While it is known that access to physical infrastructure enhances household welfare, there are very few micro-econometric studies that analyze its role in mitigating chronic and transient poverty. This paper aims to bridge this gap in the existing literature by evaluating the impact of a large-scale irrigation infrastructure project implemented in Sri Lanka. It identifies the treatment effect of irrigation access by exploiting a situation where the government used lotteries to distribute irrigated plots. Furthermore, in order to disentangle the channels through which the irrigation reduces poverty, we extend the seasonal consumption smoothing model of Paxson (1993 ; “Consumption and Income Seasonality in Thailand.” Journal of Political Economy 191(1):39–72) by introducing endogenous credit constraints. Using unique household level monthly panel data over a year, it is shown that with irrigation accessibility, not only the average income increases but also the patterns of income fluctuation changes and the probability of binding credit constraint declines through which transient poverty is mitigated. These empirical results suggest that irrigation infrastructure has a positive impact on reducing both chronic and transient poverty directly and indirectly by improving income and relaxing credit constraints. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png The B.E. Journal of Economic Analysis & Policy de Gruyter

The Role of Infrastructure in Mitigating Poverty Dynamics: The Case of an Irrigation Project in Sri Lanka

Download PDF
28 pages

Loading next page...
 
/lp/de-gruyter/the-role-of-infrastructure-in-mitigating-poverty-dynamics-the-case-of-KPDd0mGgaQ

References

References for this paper are not available at this time. We will be adding them shortly, thank you for your patience.

Publisher
de Gruyter
Copyright
Copyright © 2014 by the
ISSN
2194-6108
eISSN
1935-1682
DOI
10.1515/bejeap-2013-0091
Publisher site
See Article on Publisher Site

Abstract

Abstract While it is known that access to physical infrastructure enhances household welfare, there are very few micro-econometric studies that analyze its role in mitigating chronic and transient poverty. This paper aims to bridge this gap in the existing literature by evaluating the impact of a large-scale irrigation infrastructure project implemented in Sri Lanka. It identifies the treatment effect of irrigation access by exploiting a situation where the government used lotteries to distribute irrigated plots. Furthermore, in order to disentangle the channels through which the irrigation reduces poverty, we extend the seasonal consumption smoothing model of Paxson (1993 ; “Consumption and Income Seasonality in Thailand.” Journal of Political Economy 191(1):39–72) by introducing endogenous credit constraints. Using unique household level monthly panel data over a year, it is shown that with irrigation accessibility, not only the average income increases but also the patterns of income fluctuation changes and the probability of binding credit constraint declines through which transient poverty is mitigated. These empirical results suggest that irrigation infrastructure has a positive impact on reducing both chronic and transient poverty directly and indirectly by improving income and relaxing credit constraints.

Journal

The B.E. Journal of Economic Analysis & Policy – de Gruyter

Published: Jul 1, 2014

References

  • Infrastructure and Regional Economic Development in Rural China
    Fan
  • Infrastructure, Externalities, and Economic Development: A Study of the Indian Manufacturing Industry
    Hulten