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

Yasuyuki Sawada, Masahiro Shoji, Shinya Sugawara () and Shinkai Naoko ()
Additional contact information
Shinkai Naoko: Graduate School of International Development, Nagoya University, Nagoya, Japan

The B.E. Journal of Economic Analysis & Policy, 2014, vol. 14, issue 3, 1117-1144

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.

Keywords: poverty reduction; role of infrastructure; monthly panel data (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

Downloads: (external link)
https://doi.org/10.1515/bejeap-2013-0091 (text/html)
For access to full text, subscription to the journal or payment for the individual article is required.

Related works:
Working Paper: The Role of Infrastructure in Mitigating Poverty Dynamics:The Case of an Irrigation Project in Sri Lanka (2010)
Working Paper: The Role of Infrastructure in Mitigating Poverty Dynamics: The Case of an Irrigation Project in Sri Lanka (2009)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bpj:bejeap:v:14:y:2014:i:3:p:28:n:13

Ordering information: This journal article can be ordered from
https://www.degruyter.com/journal/key/bejeap/html

DOI: 10.1515/bejeap-2013-0091

Access Statistics for this article

The B.E. Journal of Economic Analysis & Policy is currently edited by Hendrik Jürges and Sandra Ludwig

More articles in The B.E. Journal of Economic Analysis & Policy from De Gruyter
Bibliographic data for series maintained by Peter Golla ().