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Study on Rural Poverty Reduction Effect of Traffic Infrastructure

2014-04-10JunpingGUOBinZHANGXiyanZHANG

Asian Agricultural Research 2014年7期

Junping GUO,Bin ZHANG,Xiyan ZHANG

1.National Academy of Economic Strategy,CASS,Beijing 100045,China;2.Graduate School of Chinese Academy of Social Sciences,Beijing 102488,China;3.Finance&Economics College of Hebei Normal University of Science&Technology,Hebei066004,China

The infrastructure is general physical condition essential for survival and development of society.It refers to physical engineering facilities providing public services for social production and residents'living,and public service system for guaranteeing normal operation of social and economic activities of a country or region.The infrastructure includes public facilities,such as traffic and transportation,post and telecommunications,energy supply directly participating in production process,commonly called physical or economic infrastructure.Besides,it also includes social undertaking such as education,science and technology,medical care and health,and culture and sports favorable for forming human capital,social capital and cultural capital,namely,social infrastructure.As early as 1945, famous economist, Zhang Peigang,defined industrialization as"a series of changes in strategical production function"in his doctoral thesis Agriculture and Industrialization.He incorporated infrastructure into strategical production function and stressed status and function of infrastructure in industrialization process as"social overhead capital".Traffic infrastructure,as an important part in public investment of government,generally refers to integrated traffic and transportation network with road,railway,and airline as major part and waterway and pipeline as auxiliary part.As for the poverty problem,it is a worldwide problem and its connotation undergoes from income poverty,ability poverty,to poverty of rights.According to the definition of Indian Economist Amartya Sen in Poverty and Famines:An Essay on Entitlement and Deprivation,poverty is not simply shortage of supply,but lack of ability to reach the minimum living standard.Since the reform and opening-up,Chinese government constantly strengthened development of poverty reduction.It has made outstanding achievement:rural population below the poverty line reduced to26.88million in 2010 from 94.22million in 2000,and the poverty incidence dropped from 10.2%to 2.8%.In this process,long-term investment of government in infrastructure construction plays a great role in slowing down rural poverty.One example is providing work as a form of reduction.For several decades,the relationship between traffic infrastructure and poverty rate has attracted high attention of both domestic and foreign political circle and academic circle,and they have made valuable study achievement.However,due to analysis viewpoint and materials available,many scholars and experts have certain conflicts and disputes about some key problems.In this study,we made an overview of both domestic and foreign literature,analyzed core parts and leading achievements,and made effort to find out starting point or direction of further study.

1 Function of rural traffic infrastructure construction for poverty reduction

Action mechanism of rural traffic infrastructure(especially rural road construction)for poverty reduction lies in:i)direct action on poverty-stricken areas and local poor farmers;ii)indirect action on rural poverty reduction through pulling regional economic growth,and trick-down effect[3].

1.1 Representative viewpoints about direct action of rural traffic infrastructure on poverty reduction(i)The first viewpoint:scholars hold positive attitude and affirm that traffic infrastructure has significant positive effect on rural poverty reduction.Hearn et al.proved improvement in road infrastructure is favorable for increasing reasonable and effective allocation of social resources in the entire poverty-stricken region from allocation of production factors,circulation of agricultural products,and formation of competitive market[4].Jacoby[5]believed that broad rural road network will bring constant benefit and poor people can share common wealth.Roberts et al.[6]observed and found that physical separation is a powerful poverty-leading factor.Compared with those who can obtain social and economic services,those who fail to obtain such services will become poorer and easily bemarginal-ized.(ii)The second viewpoint:some institutions and experts hold partially negative attitude or doubtful attitude[7-10].The World Development Report[10]stated that the investment in traffic infrastructure in developing countries is difficult to bring real benefit to rural poor people.Certainly,some scholars think that the relationship between traffic infrastructure and poverty reduction is not proved by experience yet,and the actual poverty reduction effect is not significant,because availability of traffic is only one factor influencing rural regional development.Sometimes,this is not the most important.Traffic network may even lead to unfair problem between regions or within regions.

1.2 Indirect action of rural traffic infrastructure on poverty reduction,the process following progressive logic relationship of"traffic infrastructure→ economic grow th→ rural poverty reduction"

1.2.1 Action of traffic infrastructure on economic growth.There are vast and numerous literature about the relationship between traffic infrastructure and economic growth.As early as1776,Adam Smith had stated,in his monumental work The Wealth of Nations,that traffic plays a decisive role in social division of labor,foreign trade,and promoting urban and regional economic prosperity,and stated that traffic improvement is the most effective one in all improvements[11].Karl Marx pointed out the function of shipping and railway on promoting development of industrial capitalism in Capital[12].Later,with deepening and expansion of the economic growth theory,as well as wide application of econometric and statistic software,most researches of this field adopt theoretical and empirical analysis combined methods.Through systematic combing of related literature,it is easy to find that traffic infrastructure and economic growth take on long-term stable balanced relationship,and input and development of traffic infrastructure have significant promoting effect on economic growth[13-16],but there is dispute about whether the former is Granger cause of the latter.Zhang Xueliang et al.[17]stated that economic growth is Granger cause of infrastructure development;Yang Fan[18]and Banerjee[19]believed that traffic infrastructure is Granger cause of economic growth;Zhang Di et al.[20],with the aid of error correction model and Granger causal relationship inspection,found that the relationship between traffic infrastructure construction and economic growth takes on dynamic balance in short term,and there is two-way causal relationship between traffic infrastructure construction and economic growth,which is consistent with study of Ju Qingjiang[21].

1.2.2 Influence or contribution of economic growth to rural poverty reduction.The relationship between economic growth and poverty reduction is always a hot spot in developing countries,international community and economics circle.In recent years,many researchers evaluate the effect of economic growth on poverty reduction with poverty reduction oriented economic growth and poverty reduction index.Dollar et al.[22]and Kraay et al.[23]proved that economic growth is a primary cause for implementation of poverty reduction strategy.Wang Sangui[24]also pointed out economic growth has both direct and indirect effect on poverty reduction:i)direct effect:providingmore and better employment and income-increasing opportunities for poor people;ii)indirect effect:increasing financial revenue of government so as to make government have financial ability to support poverty reduction.If we divide changes of poverty into economic growth and income allocation factors,the former can account for70%short period poverty changes and 95%long period poverty changes[25].Different from the above opinions,Wang Bingbing[26]believed that economic growth may not bring about poverty reduction.On the contrary,it may lead to Matthew effect and widen the gap between rich and poor,because poverty reduction depends not only on economic growth,but also on quality and nature of economic growth(such as income allocation).According to calculation of Huang Jikun et al.[27],the trickle-down effect of economic growth may only improve welfare situation of poor people to a certain extent.

2 Channels of action of rural traffic infrastructure on poverty reduction

Traffic infrastructure reduces rural poverty mainly through 4 channels:i)increasing non-agricultural employment opportunities of rural labor and increasing income of poor people;ii)reducing costs for agricultural production,transportation,and labor transfer;iii)improving traffic availability of rural areas and changing weak availability of rural social services;iv)promoting development of domestic tourism resources and adjustment of agricultural industrial structure.These4 aspects may increase employment and wages of rural poor labor through direct income allocation effect,or benefit rural poor people through trick-down effect of economic growth,finally increase actual disposable income and consumption expenditure of poor people,to raise the welfare level and slow down poverty[28].

2.1 Increasing non-agricultural employment opportunities of rural labor and increasing income of poor people Traffic infrastructure construction and development of related sectors play an important role in poverty reduction.It will provide moren on-agricultural employment opportunities,especially for rural labor.Thus,this is an effective approach for directly increasing income of poor farmer households.According to analysis of experts,building 1 km railway will consume100 000 work days,100million yuan investment in road needs an average of 450 000 work days(about 2 000 jobs).Departments directly or indirectly providing road construction fund can provide jobs2.4 times more than that of road building.Zhu Ling[29]analyzed influence of road construction at different stages and stated that road construction not only open sup great space of labor demand,but also enriches technical skills of local participants(especially rural labor).Similar to opinion of Zhu Ling,Fan Shenggen et al.[30]and Johnson[31]also believed that investment in rural road can increase non-agricultural employment opportunities of farmers,speed up the process of shaking off poverty and setting out on the road to prosperity,and narrow the income gap between urban and rural residents.

2.2 Reducing costs for agricultural production,transportation,and labor transferConstruction and improvement of traffic infrastructure not only save costs for production of agricultural products and circulation of goods,increase transportation quality,but also facilitate poor people in middle and western regions to move to coastal areas and large and medium cities for highincome jobs.Peng Daiyan[32]analyzed time series data of Hubei Province and found that infrastructure construction like road plays an outstanding role in reducing integrated production cost of agriculture.Wu Guobao[33]pointed out that improvement of road in poverty-stricken areas is favorable for far mersobtaining convenient transportation services,reducing transportation time,and reducing transportation cost.Li Sheng wen et al.[34]thought that development of rural road shortens market distance,reduces logistic cost and market segmentation,increases transaction efficiency,and reduces transaction cost.

2.3 Improving rural traffic availability and changing weak availability of social servicesThe traffic availability means difficulty of passengers in reaching destination by public means of transportation.If traffic network satisfies travelling demands of passengers,the traffic availability is high[35].In the world,the rural availability index(RAI)is used to evaluate availability and mobility of traffic.Grootaert et al.[36],when evaluating social and economic influence of rural road,pointed out that rural road has realistic significance for strengthening agricultural technical extension,sharing education and health resources,and deepening urban and rural interaction.Walle et al.[37]stated that transformation project of rural road exerts immediate influence on community welfare resources and family living conditions,such as increasing cargo service of community,saving time for seeking medical advice,facilitating shopping and loans and deposits.Gibson et al.[38]surveyed the influence of road availability on poverty with the aid of family investigation data of Papua New Guinea,and found that the shorter the time for nearest road(or urban downtown),the possibility of falling into poverty is lower.

2.4 Promoting adjustment of agricultural industrial structure and development of rural tourism resourcesAccording to current natural situations,the present agricultural structural adjustment not only increases traffic demands,but also imposes higher requirement for quality of transportation services.By contrast,traffic and transportation also influence secondary and tertiary industries in rural economic strategic structural adjustment,even planting and breeding scale and distribution in agricultural structural adjustment.After contrastive analysis of 7 poverty stricken counties in Zhumadian and Xinyang cities of Henan Province,Dong Yan et al.[39]believed that improvement of road conditions greatly speeds up adjustment of agricultural industrial structure and development of rural tourism resources,and rapidly increases disposable income of rural residents.Wu Guobao et al.[40]proved that those farmers with available road have substantial change in agricultural production structure,mainly manifested in reducing land for grain crops,increasing land for industrial crops and animal husbandry,and increasing commodity rate of industrial crops and livestock products.Ju Qingjiang et al.[21]also proved that rural road construction level has significant influence on China's agricultural and non-agricultural production,and shows constant scale economic benefit in both agricultural and non-agricultural production growth.

3 Results of empirical analysis on poverty reduction effect of rural traffic infrastructure

Dating back to the1980s,domestic and foreign scholars started to study function of traffic infrastructure to economic growth and income allocation,and reached the conclusion that traffic network can increase welfare of poor people.However,limited to shortage of measurement technology and scientific experience,it is difficult for economists to separate influence of traffic on rural development or poverty reduction from other infrastructure and national policies.By the 1990s,the poverty issue drew strong social response again.In order to explore effect of traffic infrastructure on poverty reduction,many scholars collected numerous data to quantify effect of traffic infrastructure on economic growth and changes in farmers'income.Nevertheless,since evaluation methods,dataand regional conditions are different,empirical analysis results of different scholars are varied(as listed in Table1).From Table1,we can see that traffic infrastructure construction in different countries in different period can significantly reduce rural poverty incidence,increase farmers'income,and promote economic growth.

Table 1 Comparison in estimation of poverty reduction effect of traffic infrastructure

4 Policy recommendations for building pro-poverty traffic infrastructure

With changes of times,traffic infrastructure has been widely advocated by international institutions like World Bank as means of poverty reduction.Now,it is generally accepted that rural road construction is a fundamental condition or key factor for promoting rural development and improving living conditions of poverty stricken areas.It not only increases limited road mileage,but also exerts positive influence on local industrial development,economic structure,farmers'income,life style,education,medical care and even social stability[47].Here,on the basis of existing research conclusions,we came up with following policy recommendations:

(i)In the implementation of infrastructure construction in new socialist countryside construction,government should firstly consider building village roads that require lower technology,less investment,but closely relate to production and living of farmers,shortening the distance from farmers to roads,increasing density of road network,and making effort to reach the optimum poverty-reduction effect with limited funds in shortest time.

(ii)Since the function of traffic infrastructure for economic growth lags behind,construction of traffic infrastructure should be carried out in advance moderately.In other words,in rapid economic development,the traffic investment speed should be greater than the economic growth rate.In brief,the investment in traffic infrastructure should follow the principle of satisfying demand of economic growth,and keep proper construction scale,so as to avoid bottleneck effect of various transportation demands.

(iii)Investment should be mainly put in traffic infrastructure of economically less developed areas.Since China's regional infrastructure level is basically consistent with local economic development,if measured from the perspective of fairness,government should invest more in middle and western economically less developed areas,to realize regional balanced development and equalization of basic public services.

5 Conclusions

In conclusion,the relationship between traffic infrastructure and rural poverty reduction mainly lies in acting mechanism,main channel,effect evaluation or measurement of poverty reduction of rural traffic infrastructure,as well as how to maximize poverty reduction effect of traffic infrastructure.Obviously,making clear of the above question is helpful for government understanding necessity and feasibility of future pro-poverty traffic infrastructure construction,and fundamental policy,optimum scale,structural arrangement,priority,and regional distribution,etc.However,past researches have following blind areas:i)there is less discussion about regional difference in poverty reduction effectof traffic infrastructure.Since conditions of eastern,middle and western areas are greatly different and different regions stay at different development stages,it is recommended to analyze poverty reduction effect of traffic infrastructure in combination with local situations.ii)Many scholars limit their studies in descriptive statistical analysis and fail to deeply explore underlying rules or facts.iii)The analysis at econometric model level is to be improved,such as error of default variable,error of sample selection,and error of reverse causality,etc.

In future,there are two fields worth exploring in the relationship between traffic infrastructure and poverty reduction:i)apart from roads,it is recommended to make detailed analysis on leverage of railway,inland river,and pipeline on regional economic growth.Also,it should take full consideration of regional characteristics and farmers'income level and provide more powerful analysis framework of different types of traffic infrastructure for poverty reduction.ii)It is recommended to build more scientific evaluation indicators,design more strict survey questionnaire,increase representative and capacity of samples,select proper estimation methods,and prove reasonable scale of traffic infrastructure investment in poverty-stricken areas,to further adjust and optimize the investment structure.

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