This page contains a Flash digital edition of a book.
Foreword T


he allocation of public expenditures in rural areas is of paramount importance if rural poverty reduction and agricultural growth are key objectives in a country’s development strategy. Nepal is a good example of a country where rural development expenditures are formally prioritized within the budgetary planning process, but development strategy must be combined with impact assessment to determine the effectiveness of different types of expenditures.


The Ninth Five-Year Plan provided policymakers with a coherent devel- opment strategy that emphasized regional interconnectivity to unlock the agroecological diversity of the country. Despite this development strategy, policymakers are often faced with difficult choices over the ranking of pub- lic expenditures or deciding which expenditures are paying off in terms of poverty reduction and growth. This research monograph provides evidence about whether access to rural roads, irrigation infrastructure, and extension services had a significant impact on household welfare over the period of the Ninth Five-Year Plan.


However, evaluating the impact of public investment is limited by method- ological challenges. Each of the commonly used econometric techniques has its advantages and limitations. This research uses diverse identification strat- egies to reduce the risk of using a narrower set of results driven primarily by a particular methodology. IFPRI research shows that the effect of rural roads is robust across two different econometric strategies, while the effect of irriga- tion and extension services on household welfare is less robust. Access to rural roads improves households’ welfare as measured by land values, consumption growth, poverty reduction, and agricultural income growth. The research also shows statistically significant impacts of irrigation using a hedonic model, while an alternative panel data approach did not yield significant estimates of the impact of access to irrigation or extension services. These results identify both areas in which further expenditure allocations should be made and areas in which future research is needed to better understand how the effective- ness of certain rural investments can be improved.


Shenggen Fan Director General, International Food Policy Research Institute viii


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50