Rural Road Impact Studies: Some Reflections

1. Rural Road Impact Studies: Some Reflections John Hine TUDTR World Bank

2. Why study impact? • General information about socio-economic conditions and use of roads ? • To provide an indication of the impact on poverty reduction ? • Research on a particular aspect ? • A post evaluation of a particular road investment ? • A detailed assessment of the impact of road investment in order to influence budgets, road planning criteria and road design ?

3. How and when will rural road investment most obviously promote development ? • When there is a large change in transport costs: This is dependent on change in road condition (new road or improvement) road length and mode of transport • New and under-used resources of land and labor that can be brought into production • Mobile capital and competitive markets • Large external markets to absorb increased production

4. Effects and impacts of road investment

5. How do we find the impact of roads investment? Three main methods: • Historical before and after studies with controls (the double-difference approach) • Geographical cross-sectional studies that compare areas with good access with poor access at the same time • Macro econometric studies using regional time series data The methods may show an association or disprove a connection between roads and development but it is usually impossible to prove a causal link between road investment and development

6. What came first the chicken or the egg?. Roads are not built or planned in a vacuum. The standard method of planning roads is to put them where the strongest growing demand is. Planners look at traffic levels and economic activity. Politicians are sensitive to those who shout the loudest. So if roads are built to serve the most dynamic areas and communities, and we later find that successful communities had road access but unsuccessful ones did not - what does this show? - It may only demonstrate conventional planning practise –not that the roads caused the development! Hence there are dangers in basing an analysis just on the presence or absence of an investment.

7. Why are so many road impact studies a disappointment ? • A failure to understand the rural economy and environment • A failure to build in sufficient controls in the survey design • A failure to explore alternative explanations • The treatment of road impact as a ‘black box’; so the causes of impact are not subject to detailed analysis • A tendency to ignore how road investment affects fares, tariffs and vehicle accessibility • Starting the ‘before’ survey after road work has started • Insufficient planning and funding for follow-up surveys • Bad luck with factors beyond our control : roads for improvement may not be completed and ‘control’ roads get improved. New development initiatives occur and major (unrelated) investments take place.

8. What are the factors that create differences and variation in agricultural output ? In planning ‘controls’ and analyzing impact we need to be aware of heterogeneity of rural areas and the range of factors that can cause variation over time. • Altitude, soil fertility, crop composition (Should a tea growing area be a control for a coffee growing area?) • Weather • Animal and plant diseases and pests • Secular and cyclical trends in output prices • The pattern of previous planting of tree crops • Availability and prices of inputs such as insecticide, fertilizer, labor, tractor hire and credit • Government controls and policy and extension advice

9. Some advice - If you want to influence road planning 1. • Do not base the analysis solely or primarily on the presence or absence of road investment. It is far better to base the analysis on measures of accessibility and transport costs. • Collect data on road condition (passability, roughness), and on fares and freight tariffs to main markets and commodity prices at all survey stages. Relate this data to the road investment and to measures of welfare and output in order to determine impact.

10. Some advice - If you want to influence road planning 2. An analysis that focuses on transport costs is one of the few ways of:- • establishing a plausible relationship between road investment and measures of welfare and output • Helping to overcome the ‘chicken and egg’ problem • differentiating the income effects of the initial investment from the longer term effects based on better accessibility

11. Baseline studies have been carried out all over Ghana involving: 1,563 Household surveys 304 Passenger surveys 224 Vehicle operators 104 Focus group discussions Covering: 42 Feeder Roads 11 Trunk Roads 8 Urban Roads Follow up studies will be undertaken in the same villages during 2006 and 2007 An Ongoing Study in Ghana(by Vision and Optimal Consultants)

12. Transport Cost/Km

13. Farmgate Prices • Apart from the prices of two crops in the Northern Savanna, the prices that farmers receive for farm produce are higher along completed roads than uncompleted feeder roads. • For example, in the Forest Zone, there is a substantial difference between the price of maize (¢213,000 per 100kg along completed roads and ¢173,000 along uncompleted roads).

14. Welfare and road condition • Trip frequencies to hospital are higher on completed compared with uncompleted roads. • 1.2 and 1.4 trips per household per year to hospitals along completed roads in the Savanna and Transitional Zones. While there were 1 and 1.2 respectively in each Zone on uncompleted roads.

15. Average monthly income and expenditure per household Is higher along completed roads than uncompleted feeder roads for the same Climatic Zone. (As with other surveys reported expenditure exceeds reported income).

16. Observations on the current Ghanaian Study • Two consultants appointed. Initially each wanted their own surveys, computerization and methods of data analysis. The methodologies were overly complex, paid insufficient attention to observed transport costs and would have prevented a comprehensive cross-country analysis. Now a common approach has been adopted. • Many of the initial ‘before’ surveys were started well after road investment had started. • We noticed a pattern emerging between complete and incomplete feeder roads and the current cross-sectional analysis is based on this.

17. Earlier (1980) Case Study In Ghana:Location of survey villages in Ashanti Region

18. A study of 33 villages in the Ashanti Region of Ghana 1. • Inaccessible villages • more dependent on agriculture • more labour input into farming • more sheep goats and poultry • more cocoa grown and sold per farmer • greater use of fertiliser, insecticide, extension and tractor hire • greater proportion of plantain sold

19. A study of 33 villages in the Ashanti Region of Ghana 2. • Accessible villages • more dependent on non-farming jobs • more trip making • more success in loan finance • greater proportion of cassava sold • No difference • Cocoa sales per hectare • maize yields or proportion of maize sold

20. Potential improvement of farmgate prices Percentage increase in farm-gate price of maize with improved access

21. Lessons from the earlier Ghanaian study • Short distance road improvements likely to have little impact on development • The is a very important need for basic access to ensure vehicles can pass • Small scale spot improvements to ensure access are likely to provide best value for money

22. Observations on the earlier Ghanaian Study • Insufficient attention paid to directly finding out transport tariffs, or state of the roads, for each location and perhaps too much reliance on a generalized model of transport costs. • No analysis of overall income/expenditure or welfare • The main cash crop –Cocoa- was purchased at a uniform price throughout the country. Hence improved roads would make little difference when growing and selling cocoa. • The overall state of the Ghanaian economy at the time was in a dreadful state and in terms of what farmers could buy for their efforts there was little incentive to respond to price signals.