103503 IDA AT WORK Rural Roads: Linking People to Markets and Services M any studies point to the important economic and social impact of roads which link rural communities to schools, health services and markets. Yet an estimated 1 billion people, or about 40 percent of the rural popula- tion in regions served by the International Development Association (IDA), the World Bank’s fund for the world’s poorest countries, lack direct access to an all-weather road. The size of this unmet demand is reflected in the substantial volume of IDA lending for rural roads. About US$1 billion of IDA funding per year goes into rural roads. This has generated positive outputs and outcomes: projects completed in the last five years have built, reha- bilitated or maintained some 60,000 km of rural roads—benefiting over 60 million people. Countries with a clear strategy and well-targeted IDA support for reaching rural populations have seen road access improve substantially. Econometric analyses point to significant economic impact of rural roads in India, Vietnam, Uganda, Ethiopia and Bangladesh, and the social benefits of rural roads have been shown in a study in Morocco. In the last 10 years, 90 percent of rural road projects financed by IDA had outcomes rated satisfactory by the World Bank’s Independent Evaluation Group (IEG). At a glance • Roughly 1 billion of the world’s poorest people are still without access to roads. • About US$1 billion of IDA funding goes into rural roads annually (US$540 million in transport sector projects and another US$475 million through multi-sectoral projects) • Of 329 rural road projects (1991–2006) funded by IDA, 45 percent were in Sub-Saharan Africa, followed by South Asia (16 percent) and East Asia Pacific (15 percent). • With IDA funding, 46,700 km of rural roads were constructed or rehabilitated and another 12,700 km maintained in the last five years, benefiting about 60 million people. In 2003, the World Bank established the rural access index as one of several key diagnostic measures for the sector. The data has allowed assessment of access needs and monitoring of progress. In its advice and publications, IDA has encouraged more community ownership of rural roads, more use of local labor, and more resources for road maintenance. Aiming at greater local ownership and lower transaction costs, there is now increasing emphasis on programmatic and sector-wide approaches, where IDA collaborates with both national governments and other donor agencies to support ongoing national programs. The large India and Vietnam programs are examples of this. ■■■ SECTORAL CONTEXT Jamuna River in Bangladesh, a project co- financed by IDA, the Asian Development Bank The Bank’s work in the transport sector. and the government of Japan, has boosted traffic, employment and trade by facilitating The World Bank’s recent Transport Business transport of passengers, freight, and electric- Strategy for 2008–2012 stresses the need for ity and so economically as well as literally transport to be “Safe, Clean, and Affordable.” linking northwest Bangladesh to the rest of The strategy approaches transport improve- the country. ments in the context of what is needed to achieve the Millennium Development Goals Over the last 10 years, IDA’s main transport (MDGs). Improved transport makes five key priorities have been the construction, reha- contributions to sustainable development: bilitation and maintenance of roads and high- ways, representing approximately 77 percent • It improves trade which facilitates eco- of commitments for the sector. Within this nomic growth and regional integration. category, rural roads account for three quar- • It makes cities work better for their ters of the commitments. citizens, for the environment, and for economic growth. Policy objectives for the roads sub-sector • It creates economic opportunity and have included improved asset management, growth in rural areas through better access sustained funding for road maintenance, to markets. increased private sector participation in • It provides access to health care facilities road maintenance, and performance-based and schools. contracting. IDA lending has also addressed • It is safer and cleaner for users and the policy and institutional development as well community. as urban transport, together accounting for about 13 percent of the transport sector IDA support has addressed critical infra- total. structure bottlenecks to promote economic growth and improve trade. For example, the The remaining 10 percent include interven- 1999 completion of a 4.8-km bridge over the tions in ports, shipping, railways and air transport. 2 This note focuses on rural roads. Rural roads community driven development projects. cannot be divorced from the management of Rural roads are a priority for communities and the main road network and the rest of trans- naturally fit into projects that support area port sector. National transport issues such development, agriculture or social objectives. as road safety, road maintenance, the avail- Research shows the synergies among sectors ability and cost of transport services need to and the strengths of an integrated approach be addressed along with the provision of rural at the local level. roads. Similarly, regional and social develop- ment policies strongly influence government A systematic approach to programs for rural roads. measuring results. A focus on maintenance and IDA’s introduction of the rural access index community-driven initiatives. (included in 2005 in the IDA Results Mea- surement System) has generated interest in Sustainable road maintenance is a key con- investigating the resources and time required cern. IDA has been addressing it by securing to improve rural accessibility and reduce adequate and reliable funding; promoting transport costs, in order to help combat pov- “second generation” road funds (mainly based erty and stimulate growth. on user charges on fuel); supporting efforts to commercialize road maintenance operations; The Rural Access Index for roads measures and helping build institutional capacity. As the percentage of the rural population that a result, over the past 10 years, road main- lives within 2 km (typically equivalent to a tenance in most IDA countries has benefited walk of 20–25 minutes) of an all-season road. from substantially improved funding levels and In 48 countries for which the data has been efficiency. Returns from good maintenance are calculated—and which represent 89 percent of huge, typically many times the returns from the rural population in IDA countries—only 56 road improvement or rehabilitation. percent of the rural population had access to an all-season road in 2006. In middle-income Rural roads are an important component of countries that borrow from the World Bank’s multi-sectoral projects, which are typically other lending arm, the International Bank for Rural Access Index: Regional Values: 2006 (IDA countries only) Europe/ Latin Middle East Asia/ Central America/ East/ South Region Africa Pacific Asia Caribbean North Africa Asia Total Rural Access Index (%) 36 88 62 32 21 57 56 Countries covered (number of) 25 7 6 4 1 5 48 Rural population covered (%)1 77 85 75 73 99 96 89 Source: Household survey; Bank staff calculations. Note: Values of the Rural Access Index continue to be updated. 1. This shows the percentage of the whole IDA rural population for each Region which is in the countries covered. 3 Reconstruction and Development (IBRD), the lic expenditure. For every 1 million Rupees comparable figure is 87 percent (based on 31 (US$22,000) invested in rural roads, 163 IBRD countries). people were lifted out of poverty. Hence, it is estimated that nearly 1 billion of In Vietnam, the level of economic activity the world’s poorest people remain marginal- was found to relate closely to the extent of ized without direct access to an all-weather the rural road network. After agricultural road. research, road investment produced the highest return of expenditures among various Although time series data are limited, there sectors. For every Dong invested in roads, is evidence that the rural access index has the value of agricultural production would improved substantially over time in countries increase by three Dong. that have a clear strategy for improving rural access and that rely on well-targeted support In Bangladesh, research found that road from IDA and other agencies. improvement projects led to a 27 percent increase in agricultural wages and 11 percent In Ghana, rural access has increased from 44 increase in per capita consumption. The inci- percent in 1997 to 61 percent in 2003, ben- dence of moderate and extreme poverty fell efiting approximately 1.5 million rural people by between 5 and 7 percent. Road improve- (13 percent of rural population). In Vietnam, ment also led to an increase in schooling of rural access grew from 73 percent in 1998 to boys and girls. 84 percent in 2004, connecting an additional 6 million people to markets and services. A Lifeline in Ethiopia Comparable measures are being established to determine the level of “urban mobility” The New York Times, November 8, 2004, reported and to gauge transport costs as a measure of on an IDA road project in Ethiopia: affordability. The former will become increas- ingly relevant as the number of poor people “A few months back, Desalegn Godebo’s wife descended into a feverish delirium.” It was as if living in urban areas in IDA countries grows. she were mad,” the farmer said, shuddering at the memory. “She was scratching me like a crazy A cost-effective path to poverty reduction. woman.” Before a new road was built through this village, Mr. Godebo would have loaded his wife Econometric studies in India, Vietnam and onto his back and hiked six hours along narrow Bangladesh,1 where IDA has had large rural dirt paths to Awasa, a small city. Instead, he lifted her into a truck for the one-hour ride to town. Her roads programs, show the significant develop- condition was diagnosed as malaria and typhoid. ment impact of improved roads. She is well now and back home caring for their baby. In India, expenditures on roads were found to have by far the largest impact on rural The dirt-and-gravel road may look like a timeless poverty compared with other types of pub- feature of the Great Rift Valley. But it is, in fact, part of a huge public road-building project that is slowly hauling one of the poorest, hungriest 1. The studies were carried out by Fan, Hazell and Thorat (2000) for India; Fan, Huong, and Long (2004) for Vietnam; nations on earth into modernity.” and Khandker, Bakht, and Koolwal (2006) for Bangladesh. 4 IDA CONTRIBUTIONS 2006 had a significant institutional develop- ment component. In India’s state of Andhra IDA’s global knowledge and long-standing Pradesh for example, a rural roads program engagement with both national and local together with an economic restructuring clients have enabled it to address the issues project financed jointly by IDA and the IBRD of road maintenance, transport service costs, (the World Bank’s two lending arms) spurred community ownership, and integrated rural the state government to adopt a policy accessibility planning that are critical to the framework for rural roads and update plan- sustained impact of its lending. ning practices, construction standards and maintenance management systems. Because of its work on multiple road pro- grams, IDA has developed a strong capacity Other results are vividly tangible. Also in for diagnosing bottlenecks and can recom- Andhra Pradesh, an IDA roads project was mend solutions and encourage institutional linked to substantial growth in crop yields, innovation (such as second-generation road cultivated land, seasonal work opportunities, funds) for more successful implementation of and literacy rates. It also reduced spoilage new projects and programs. of perishable agricultural products and gen- erated better prices for farmers, as well as Investment projects. increased attendance at schools and health clinics. Supporting the building of rural roads is a core element of this effort. Over the last 10 years, In Bhutan, an IDA rural roads project reduced IDA lending for rural roads has averaged about the average travel time and travel costs to US$1 billion per year, or 14 percent of total hospitals and markets by some 75 percent in IDA lending. five of Bhutan’s 20 districts. Reduced travel time means villagers now send their children Of all 329 IDA projects approved between to non-community schools, which used to be 1991 and 2006 with a rural road component, prohibitively far by foot but have become 45 percent were in Sub-Saharan Africa, fol- easily accessible by bus. Once a new road lowed by South Asia and East Asia Pacific. Of turned a six-hour trek into a one-hour com- these projects, 18 percent were dedicated mute, families in Kikhar sent 32 children off rural road projects, 14 percent were roads/ to school—instead of just the four that had transport sector projects that addressed rural gone in the past. Local commerce, construc- roads among other things, and the remaining tion methods and agricultural practices have 68 percent (224 projects) were multi-sectoral all been galvanized and transformed by vil- projects with rural road components. lagers’ new proximity to markets and goods. Corrugated iron roofs are replacing banana Results on the ground. leaf roofs, and income from sales of agricul- tural produce has grown—on average, by 64 Some of the results of IDA operations are percent. institutional. About two-thirds of IDA proj- ects on roads in a sample of 37 projects The establishment of a road fund in Ethiopia implemented between Fiscal Years 2002 and in 1997 substantially increased maintenance 5 Road Funds Road funds have emerged as one of the more popular forms of financing road sector funding gaps by pooling fuel taxes, toll fees and other resources under various institutional arrangements and oversight rules. Commercially managed funds with financial discipline and minimum adverse impact on the state budget are considered good practice and are called “second-generation funds.” The Road Maintenance Initiative, one of the central components of the Sub-Saharan Africa Transport Program (SSATP), a joint undertaking of the United Nations Economic Commission for Africa and several development agencies coordinated by the World Bank, as well as the establishment of road funds have helped increase maintenance funding and its stability throughout Africa. Since 1994, 26 new road funds have been set up in African IDA countries. Although the lion’s share of funds from this source has gone into main roads, rural roads have also benefited. funding. The condition of road work improved Overall, IDA’s rural road projects have had significantly. The overall proportion of roads strong outcomes: 90 percent of the 156 rural in poor condition dropped from 53 percent in road projects that closed between 1994 and 1995 to 40 percent in 2002—that share fell 2006 were rated satisfactory (well above the from 60 percent to 37 percent for regional 70 percent average for the totality of all IDA roads alone. projects), including 8 percent rated highly satisfactory. Economic rates of return for The new road funds have also helped the the rural road components of eight projects development of small-scale contractors. A ranged from 11 percent to 66 percent with an good example is found in Tanzania where a average of 29 percent. fund helped establish more than 2,000 new small-scale contractors. Road funds have also However, the multi-sectoral nature of many helped improve contract management. It now projects that include road components make takes African road funds in Tanzania an aver- it difficult to attribute outcomes to roads age of 32 days to pay undisputed contractor alone. Progress is typically the product of bills, whereas in Burundi, which does not a combination of factors that include rural have a road fund, it takes one year. infrastructure, community development, and local governance. Road building can also help improve gover- nance. IDA’s rural road upgrading program in A good example of this is the IDA-supported Vietnam was found to have a dramatic effect rural infrastructure project in Senegal which on transparency, accountability and equity,2 included substantial road improvements, This apparently resulted from a combina- strengthened decentralization, and financed tion of training provision and better means micro-projects covering water, schools, of transport which increased the ease and livestock, among other things. Beneficiary opportunities for feedback and gave women households in the 110 participating rural better access to training. communities reported a 25 percent increase in incomes. Fiscal revenues for rural com- 2. Leisher, 2003. munities in the project area almost tripled. 6 Markets, schools, and health facilities are Overall, over the last 10 years, the Bank now more accessible (children now typically has delivered more than 600 studies and spend 10 minutes going to school instead of technical assistance papers relevant to the 30), and the weight and height of children transport sector. Roughly one-third of them under three years of age has improved. relate specifically to IDA countries. The Sub- Saharan Africa Transport Program (SSATP) Planning tools and analysis. is a particularly large knowledge program that covers rural transport in IDA countries, In addition to lending, the Bank has helped including some 320 transport reports. to develop and support the Highway Devel- opment and Management (HDM) system, the Officials in IDA countries have also received most commonly used computerized planning training courses on such topics relevant to tool for the appraisal of road investment in transport as competition and regulation. IDA developing countries. cooperated with external training providers such as the International Roads Union (for Recently, a Bank team has developed the Roads vehicle driver training) and the University of Economic Decision model (RED), an easy-to- Birmingham (for roads management). use tool for lower-volume rural roads based on HDM, which is now widely used for rural Drawing on the Bank’s strengths. road appraisal in IDA countries. Currently, the Bank is commissioning, via a trust fund IDA’s strengths in supporting rural roads managed by the UK’s Department for Interna- projects are similar to those in other sectors. tional Development (DfiD), the development They stem from IDA’s global reach and experi- of a model to incorporate social benefits into ence, the synergies with other parts of the road planning. This has particular relevance World Bank Group, and the ability to work to isolated poor rural communities. across disciplines and across different modes of transport. Other planning tools have been developed for calculating appropriate road user charges Because of its convening power, its strong (suitable also for use by road funds) and financial management (particularly of com- significant databases of road construction plex trust funds), and its linkage with invest- costs and vehicle operating costs have been ment programs, IDA is able to play a forma- assembled. These have made the appraisal tive and leading role in global partnerships of rural road projects easier and better. such as the Global Facilitation Partnership Extensive documentation has been prepared for Transportation and Trade, the Global Road on road funds, public-private partnerships, Safety Partnership and the Sub-Saharan Africa rural road design, rural transport planning, Transport Program already mentioned. and rural road administration. A report on the design and appraisal of rural infrastructure The Bank has the largest concentration of has had a significant impact on the design of full-time transport professionals of any donor low-volume traffic roads and the adoption of organization. Its extensive research capacity, suitable, low-cost solutions (including a “spot institutional knowledge and experience put improvement approach”). IDA it in a good position to understand the 7 transport challenges of most countries. The Making Rural Roads Work for Vietnam multidisciplinary capabilities of IDA allow multi-sectoral and rural community-driven IDA’s support for the rural transport program in initiatives. Vietnam drew on a winning combination of skills and capabilities: These comparative advantages are recognized in a number of specific areas: 1. IDA provided predictable financial support and coordination with other donors over a sustained period of time: US$264 million for • assisting through dialogue with governments three projects covering 15 years (1996–2011). the formulation of national and rural trans- Combined technical expertise and large-scale port policy, strategy and programs; support enabled the government of Vietnam to • preparing terms of reference and using realize the poverty reduction impacts that rural technical expertise for policy analysis and roads can provide. project formulation; 2. IDA helped develop the fledgling private • preparing, financing, and managing the sector by ensuring access to the rural road implementation of investment projects construction market where state provision was, that are demanding, either because of until recently, the norm. their size or complexity; • raising awareness of the need for a compre- 3. Technical assistance helped increase the effectiveness of public spending in the hensive approach to improving transport transport sector and assisted the government services, road safety, road maintenance to make the best use of the US$3 billion of and for an Integrated Rural Accessibility investment expected in the sector over the next Planning approach rather than just reha- five years. bilitating rural roads; • providing results frameworks and metrics Moving away from project support, the program’s third phase (2006–11) will focus on the national (such as the Rural Access Index) for rural and provincial road program using government transport investment and linking this with systems as much as possible. This approach human and social development issues, for includes incentives for performance and increased example to help meet the MDGs; post-implementation reviews to ensure that • encouraging community participation and procurement is carried out transparently. private-sector involvement in rural roads projects; • sharing global knowledge and providing les- LOOKING AHEAD sons learned on institutional and financial arrangements in rural transport; In responding to the needs of IDA countries • developing sector-wide approaches and during the mid-1990s, the transport sector multi-donor cooperation for rural transport tended to focus on issues related to highways, investment involving the combination of rural roads and road maintenance. Since the aid coordination, policy advice, and selec- mid-1990s, many IDA countries have made tive financial support. steady progress with improving road network maintenance, which is vital for sustainability. 8 In addition to technical support, institutional Going forward, the main and enduring areas reform and capacity building have been of IDA attention will be to ensure the financial crucial. IDA will continue to assist borrowing sustainability of rural and inter-urban road countries with governance issues and insti- infrastructure, and to encourage affordable tutional strengthening that foster ownership rural transport to improve accessibility and and accountability. reduce poverty. The experience in rural transport in particular July 2008. has shown how important it is for transport http://www.worldbank.org/ida staff to engage effectively with other disci- plines in order to better achieve the MDGs and ensure that there are equitable and sustained benefits to the poor. 9