Small Works: Poverty and Economic Development in Southwestern China

3. Roads

61 3 Roads Building Connections to Markets If you hope to become wealthy, first build a road. —Chinese saying In an administrative village in northwestern Guizhou, a large crowd of farmers, carrying heavy loads of fresh-cut vegetables on their back, had gathered. An informal weighing station had been set up, and the villagers waited patiently as men in a large green truck weighed and purchased their produce. This truck turned out to be a green China Post truck, like those common in cities throughout China. These middlemen had somehow gotten hold of the truck, which they used to transport their purchases in bulk to larger markets in Bijie and Guiyang, where greater demand and higher prices awaited. The farmers, for their part, were also satisfied with the arrangement because the prices offered by these intermediaries were significantly higher than those offered at the local market. Much of this activity had been sparked by the recently constructed roadways that connected the nearby villages to the town. Because the town was also connected by road to the prefecture capital of Bijie and larger cities beyond, this relatively modest road system provided numerous new opportunities for the villagers in the entire area. The roads not only improved the access of middlemen but also reduced travel time between the villages and marketing towns where villagers could buy and sell goods, obtain better marketing information, and even hear of work opportunities outside the area. What are the economic effects of road construction? Empirical research on the impact of roads suggest that, although the linkage between increased road infrastructure and economic growth is robust, its connection to poverty reduction is more complicated. By reducing travel time and costs and by facilitating the transportation of goods and people, roads can stimulate the production of cash crops, encouraging economic diversification, improving incomes, and enhancing quality of life. Roads allow farmers to bring 62 Chapter 3 land that was formally inaccessible into cultivation. Roads also can make it easier for public officials to enter villages to deliver health care, basic education , and extension services, among other government programs. New industries and services can become viable due to the reduced costs of travel (Howe 1984). Research by the Asian Development Bank on the relationship between roads and positive economic development throughout the world concludes that roads stimulate economic growth, with every 10 percent increase in infrastructure boosting GDP by an average of 0.4 percent (Jalilian and Weiss 2004). Studies estimate that the typical economic returns for roads are approximately 80 percent and reach as high as 200 percent in extreme cases (Estache 2004). Thus, a consensus among academics and policy makers has emerged that appropriate, well-designed, and well-positioned roads promote economic growth by connecting people to markets, reducing the costs of transportation and inputs for farmers and the costs of food for urbanites (Fan and Chan-Kang 2008). The evidence concerning the connection between roads and poverty reduction is more mixed (Howe 1984). Many argue that roads reduce poverty directly by lowering the costs of agricultural inputs, enhancing agricultural productivity, and increasing nonagricultural employment opportunities. Advocates also point to the benefits of roads for the poor in terms of opening up new markets for agricultural goods, enhancing information about market demand, and mitigating the effects of natural disasters and economic shocks.1 Skeptics, in contrast, argue that roads have little relevance for the poor, that purported benefits of roads are exaggerated, and that road construction is often a conduit for corruption (Estache 2004; Bryceson, Bradbury, and Bradbury 2008). Hossein Jalilan and John Weiss’s (2004) cross-national research concludes that the linkage between roads and poverty reduction is clearer for the better off among the poor (those earning an income of $1–2 per day, compared to those with incomes of less than $1 per day) and that this factor is significant only when combined with differences in education levels.2 To bring countries to average levels of poverty, Jalilan and Weiss’s model suggests that infrastructure improvements must be large.3 Moreover, although some case studies found a direct link between road construction and poverty reduction, other case studies in Indonesia (Kwon 2000; Balisacan, Pernia, and Asra 2002) and the Philippines (Balisacan and Pernia 2002) demonstrated that increasing road stocks did benefit the poor 1. For instance, research in eighty-five districts in India concluded that government investment in roads increased crop outputs, rural nonfarm employment, and agricultural wages, all helping to increase the income...