The Impact of Rural Infrastructure Development on Poverty Reduction in Indonesia

Nuzul Achjar () and Maddaremmeng Panennungi
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Nuzul Achjar: Institute for Economic and Social Research, Faculty of Economics University of Indonesia

Economics and Finance in Indonesia, 2009, vol. 57, 339-348

Abstract: This study aims at providing an empirical evidence of the impact of the rural infrastructure on rural poverty reduction. By using survey data from six districts in Indonesia drawn from the Indonesia Rural Investment Climate Survey (IRICS, 2006) with a probit model, it is found that improvement in general road surface conditions in the village and education level of the head of the household tend to lower the probability of the household falling into poverty. This means that both physical and non physical infrastructure (human capital) in the rural area have significant impact on poverty reduction in rural areas. It must be further underlined that rural infrastructure development be it physical (roads, bridges, electricity, irrigation, etc) or non-physical (education and health, etc) not only improves rural economic capability, but also plays a direct and indirect role in reducing poverty.

Keywords: poverty; rural development; infrastructure (search for similar items in EconPapers)
JEL-codes: H54 O18 P46 R00 (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:lpe:efijnl:200916

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