Conceptualizing inclusive development: with applications to rural infrastructure and development assistance

Abstract

This paper undertakes three tasks. The first and major task is the definition of inclusive development, in particular distinguishing it from growth, pro-poor growth and inclusive growth and differentiating these from each other. The paper then proceeds to apply this definition to specific issues focusing on rural infrastructure. The second task is to discuss the relationship between rural infrastructure and inclusive development. The third and final task is to draw out the implications of the recent literature on development assistance and its effectiveness, for donor support of rural infrastructure with the objective of inclusive development.

Keywords:

• inclusive development
• rural infrastructure
• development assistance
• Asian Development Bank

JEL classifications:

• O10
• O15
• O18
• O19
• O53

The views expressed in this paper are of the authors and do not necessarily reflect the views of the Asian Development Bank.

Notes

1. See Foster et al. (1984); for an early use of this family of indices, see Kanbur (1987); for an example of recent usage, see Ravallion and Chen (2007).

2. Although not the focus of this paper, the poverty line is a key ingredient of poverty measurement. For a review of the poverty line literature, see Ravallion (1998).

3. For a recent overview and extension of the ‘growth elasticity of poverty reduction’ literature, see Klasen and Misselhorn (2007).

4. There is a large, and by now somewhat confusing, literature on these matters. Thus Ravallion (2004, p. 2) identifies two definitions in the literature of pro-poor growth: ‘One finds two quite different definitions of “pro-poor growth” in recent literature and policy-oriented discussions. By definition 1, “pro-poor growth” means that poverty falls more than it would have if all incomes had grown at the same rate (Baulch and McCullock 2000, Kakwani and Pernia 2000). By definition 2, “pro-poor growth” is growth that reduces poverty (Ravallion and Chen 2003)’. It should be clear that the first definition comes closer to our notion of inclusive growth.

5. This pattern and its implications for the development discourse are discussed further in Kanbur (2007).

6. For a recent application to India, see Sahn (2005).

7. For a recent example, see Foster and Allison (2004).

8. See, for example, Anand and Sen (1994), Hicks (1997) and Foster et al. (2005).

9. For an early critique of the weighting issues, see Kanbur (1990). Recent efforts to address the issue include Despotis (2005) and Foster et al. (2005).

10. I would argue that these propositions are widely accepted by now, and there is a big literature supporting them. Here is a series of papers over the years that argue the case: Sen (1988), United Nations Development Programme (1996), Ramirez et al. (1998), Sen (2001), Sahn (2005), Joshi (2007) and Commission on Growth and Development (2008).

11. There is a large literature on infrastructure and growth. Here is a selection: World Bank (1994), Canning (1998), Reinikka and Svensson (1999), Haughwout (2002), Wang (2002) and Canning and Pedroni (2004).

12. For a recent assessment, see World Bank (2006).

13. In a recent paper, Estache and Fay (2007, p. 14) take a particularly skeptical line: ‘There is still considerable disagreement as to whether infrastructure accumulation can explain countries’ differing growth paths. Even if infrastructure is necessary for modern economies to function, it may not be the case that more infrastructure causes more growth at all stages of development or at any for that matter’. In a similar vein Straub et al. (2008) do not find a significant relationship between infrastructure and growth for East Asia. Part of the problem in macro-level assessments is that the infrastructure variable may be too aggregated. Duflo and Pande (2007) find that while large dam construction in India was marginally cost-effective, it contributed significantly to increased poverty.

14. The most recent compilation of evidence comes from a major United Nations University's World Institute for Development Economics Research project. The overview, summarizing evidence from 58 countries, in 26 of which there was information at two or more points in time on spatial disparities over the past two decades, is presented in Kanbur and Venables (2007). A selection of papers on spatial inequality in Asia is available in Kanbur et al. (2005). The World Bank's views and evidence on spatial disparities are summarized in World Bank (2008).

15. The evidence is overviewed in Kanbur and Venables (2007). Here are some examples of papers that argue along these lines: Ravallion (2005), Lall and Chakravorty (2005) and Christiaensen et al. (2005).

16. There is a large and growing literature on the importance of rural roads for poverty in its many dimensions – income, education, health, etc. There is a useful website http://www.ruralroads.org/ which gives a sense of the range of issues that arise. The following papers provide a flavor of the literature: Bryceson et al. (2008), Khandker et al. (2006), Asian Development Bank (2006), van de Walle (2000), Fan and Chan-Kang (2005) and Balisacan and Pernia (2002).

17. Among the websites which address the relationship between transportation, mobility and maternal mobility, and provide an overview of the extensive literature, are http://people.cornell.edu/pages/mg294/maternalmortality.html and http://ifrtd.gn.apc.org/mobilityandhealth/about/lit_review.php. Some papers in the literature are Wettasinghe and Pannila (2002), Ensor (2004), Grieco et al. (1996) and Matin et al. (2002).

18. Some recent papers are Chimombo (2005), Jacoby et al. (1999), Holmes (1999) and Khanam (2004).

19. This argument is developed for the social sectors in general and is illustrated by South Asian examples in Devarajan and Kanbur (2007). A framework for assessing whether supply or demand constraints are binding is provided in Kanbur (2008).

20. There is a significant literature on the costs of transport in rural areas and in developing countries generally. See, for example, Carruthers et al. (2005) and Raballand and Macchi (2008).

21. See, for example, Meriläinen and Helaakoski (2001) and Riverson et al. (2005).

22. I am summarizing a large literature here. Among the papers that give a flavor of the debate are the following: Burnside and Dollar (2000), Guillaumont and Chauvet (2001), Easterly et al. (2004) and Kanbur (2006).

23. The outcomes-based approach has been argued for in a number of recent papers: Collier et al. (1997), Kanbur (2005b) and Barder and Birdsall (2006).

24. This argument is developed more fully in Kanbur (2005b).

25. Some of the key recent papers in the debate on RCTs are Deaton (2009), Duflo et al. (2008) and Banerjee and He (2008) and those in Kanbur (2005a).

26. The best source for techniques and applications is the Poverty Mapping website http://www.povertymap.net/. A useful overview is found in Henninger and Snel (2002).

27. A key issue highlighted in the literature on public works schemes as employment-generating and poverty-alleviation devices is the role of the wage. Too high a wage can lead to rationing of employment, with attendant discrimination on who is given jobs on the site. See Ravallion (1999).