Can rural feeder roads improve efficiency in agricultural value chains through reduced trade costs? Are these gains enjoyed by farmers through increased producer prices, or are they captured by traders? It has been well understood that the impacts of transportation infrastructure on trade costs and the responsiveness of trade flows to trade costs are sufficient to estimate the welfare impacts under many models of trade. Despite this, there have been no quasi-experimental estimates of the impacts of rural roads on trade costs and trade flows in development countries, and existing work has focused primarily on estimating the impacts of railroads and subways on trade flows and trade costs. A growing academic literature has estimated the impacts of rural road construction on economic outcomes, but it is nontrivial to recover welfare impacts from these reduced form estimates. As a response to this gap, this research project provides new evidence on the impacts of rural feeder road rehabilitation on farmer welfare in Rwanda.
The project relies on a prospective research design that implements quasi-random rural road improvements beginning almost ten years ago and continuing up to today. Data collection will include multiple rounds of household surveys, a survey of local aggregators, a survey of farmers, a price tracking effort at local markets, and administrative data on the universe of land transactions for the whole country. The researchers will also field an experiment with truckers whereby they will offer exogenous variation in transportation services to farmers in the sample, which will allow them to estimate the effects of transportation services on output marketed directly by the farmer as well as the impact such infrastructure can have on farmer welfare.
The direct audience for this research and its outputs consists of the Government of Rwanda (GoR) and the World Bank Rwanda Feeder Roads Development Project. Beyond the direct stakeholders, the research will be of interest to the wider community of policymakers in Africa, aid agencies and academic economists. The results will be disseminated via in-country events, workshops and academic blog posts. This project is part of a portfolio of impact evaluations that the researchers, based at the World Bank, have with the GoR. This partnership, which began in 2011, greatly increases the potential policy impact of the study.
