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Business News/ Opinion / Building rural roads does not guarantee prosperity

Building rural roads does not guarantee prosperity

An analysis of the Pradhan Mantri Gram Sadak Yojana shows that rural roads have had little impact on agrarian incomes

The rural road construction programme increased mobility and allowed people to find non-farm work outside their own villages. Photo: HTPremium
The rural road construction programme increased mobility and allowed people to find non-farm work outside their own villages. Photo: HT

Rural roads are not a one-stop solution to raise rural incomes, shows an analysis of India’s Pradhan Mantri Gram Sadak Yojana (PMGSY) by Sam Asher, a World Bank economist, and Paul Novosad, assistant professor at Dartmouth College. The duo found that while the rural road construction programme increased mobility and allowed people to find non-farm work outside their own villages, the impact of new roads on overall incomes, consumption expenditure and assets was not significant. Given the substantial costs incurred in constructing roads and their upkeep, PMGSY does not appear to be a very efficient scheme in raising incomes. However, this does not necessarily mean that constructing rural roads is of no use. The authors note that improved connectivity may have long-term benefits in the form of increased access to better quality education and healthcare.

READ: Rural Roads and Local Economic Development

Livestreaming of industrial emissions can help in tracking and curbing pollution, according to a new National Bureau of Economic Research (NBER) working paper by Emiliano Huet-Vaughn, economist with the University of California, Los Angeles, and co-authors. The researchers looked at a coke plant in Pennsylvania that had repeatedly violated air pollution norms. Over a few weeks, a robotic camera recorded the smoke emissions and analysed the images to release statistics on the level of emissions. This information was posted on an easily accessible public website. They found that public complaint calls to the local pollution control body about that particular plant did not have any effect. However, the livestream resulted in an increase in complaints about other polluting plants in the same area. This suggests that visual proof can help environmental oversight, especially in developing countries where the cost of monitoring and measuring emissions is high.

READ: Livestreaming Pollution: A New Form Of Public Disclosure And A Catalyst For Citizen Engagement?

Recycling could be an important way of saving the environment, according to a recent UNCTAD policy brief. Our current model of linear consumption entails a lot of wastage: Resources are extracted, used for manufacturing goods and then discarded or scrapped post-usage. Moving to a circular economy would mean increasing the life cycle of goods through reuse, repurposing or recycling, which in turn would reduce 33% of carbon dioxide emissions from such products. This would also take care of the environmental cost of scrapping.

Also read: Circular Economy: The New Normal?

Productivity gains in manufacturing not only increase the purchasing power of workers, but also decrease local inequality, according to a new research paper by Richard Hornbeck, professor at the University of Chicago Booth School of Business, and Enrico Moretti, professor at the University of California, Berkeley. Looking at geographic differences in productivity growth in US cities, they found that productivity growth increases local employment and average earnings. While this pushes up the cost of living for renters, it benefits property owners. Productivity growth also lowers local inequality by raising demand and wages for less skilled workers, the authors show.

Also read: Who Benefits From Productivity Growth? Direct And Indirect Effects Of Local TFP Growth On Wages, Rents, And Inequality

Economics Digest runs weekly, and features interesting reads from the world of economics.

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Published: 09 Jun 2018, 01:32 PM IST
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