Investigating the interlinkages between infrastructure development, poverty and rural–urban income inequality

Abstract

Purpose The purpose of this paper is to investigate the relationship between infrastructure development, rural–urban income inequality and poverty for BRICS economies. Design/methodology/approach Pedroni’s panel co-integration test and panel dynamic ordinary least squares (PDOLS) have been used to carry out the analysis. Findings The empirical findings confirm a long-run relationship among infrastructure development, poverty and rural–urban inequality. The PDOLS results suggest that both infrastructure development and economic growth lead to poverty reduction in BRICS. However, rural–urban income inequality aggravates poverty in these nations. The paper advocates for adopting policies aimed at strengthening infrastructure and achieving economic growth to reduce the current levels of poverty prevailing in the BRICS nations. Originality/value Significant limitations exist in the literature in terms of not clearly defining the nature of relationship and interlinkages between infrastructure development, poverty and inequality, with regard to the BRICS nations. The available studies mainly focus on the relationship between infrastructure and growth, with the universal agreement being that these two are positively related. However, it is still not right to assume that economic growth attributable to infrastructure development will, therefore, subsequently lead to a reduction in inequality. This forms the basis for this study, that is, to critically examine the relationship between infrastructure development, inequality and poverty for BRICS nations.

Infrastructure and household poverty in Brazil: A regional approach using multilevel models

“…The first set of investigations includes analyses of poverty at the community or village level (Fan and Zhang, 2008;Surjono et al, 2016), regions or states (Cruz et al, 2010;Datt and Ravallion, 1998;Marinho et al, 2017;Silva and Araújo, 2016) or country level aggregations (Chotia and Rao, 2017;Jalilian and Weiss, 2004). Consequently, they try to verify the importance of contextual factors in explaining the poverty levels of certain localities.…”

Infrastructure, Economic Growth, and Poverty: A Review

“…Several studies do both: measure the growth and inequality impacts in the same paper. These studies include Calderon andChong (2004), Calderon andServen (2004), Calderon and Serven ( 2010), Chatterjee and Turnovsky (2012), Sasmal and Sasmal (2016), Chotia and Rao (2017a), Chotia and Rao (2017b) and Hooper et al (2018). Table 2 presents these studies.…”

“…While most of the studies are focused on the relationship between infrastructure development and economic growth, only a few studies have examined the linkage between infrastructure development and poverty reduction, or income inequality. The first of these topics is addressed in Chotia and Rao (2017a, b) and Sasmal and Sasmal (2016); while the second is addressed by Calderón and Chong (2004), Calderón and Servén (2004, Sasmal and Sasmal (2016), and Chotia and Rao (2017b).…”

Peran Pembangunan Infrastruktur terhadap Ketimpangan Ekonomi Antarwilayah di Indonesia

“…Kondisi tersebut menunjukkan bahwa kemiskinan paling banyak dialami penduduk perdesaan yang umumnya bekerja di sektor pertanian. Selain kemiskinan dalam dimensi desa-kota (Chotia & Rao, 2017;Madhu Sehrawat, 2016;Østby, 2016), ketimpangan juga terjadi pada dimensi wilayah lainnya, seperti antara kawasan barat-timur dan kawasan Jawa-Luar Jawa (Bhinadi, 2003;Hermayeni, Ekwarso, & Tampubolon, 2015;Yuliadi, 2012). Investasi publik menghasilkan korelasi positif antara pertumbuhan dan ketimpangan pendapatan (Charlery, Qaim, & Smith-Hall, 2016;Chatterjee & Turnovsky, 2012), namun demikian pembangunan infrastruktur yang tidak seimbang dapat menyebabkan kegagalan terhadap pengurangan ketimpangan pertumbuhan ekonomi (Chotia & Rao, 2017), karena kondisi kesenjangan antardaerah terjadi sebagai konsekuensi dari pembangunan yang terkonsentrasi pada wilayah-wilayah tertentu saja.…”