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How Infrastructure and Financial Institutions Affect Rural Income and Poverty: Evidence from Bangladesh

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  • Shahidur Khandker
  • Gayatri Koolwal

Abstract

The mechanisms by which the poor benefit from economic growth remain a topic of debate in development literature. We address this issue in the context of rural Bangladesh, using a pooled dataset of three household panels between 1991-2001. Expansion of irrigation, paved roads, electricity, and access to formal and informal credit have (through different veins) led to higher rural farm and non-farm incomes, accounting for exogenous local agroclimatic endowments that explain a large part of the variation in the growth of infrastructure and credit programmes. However, this has not translated into substantial reductions in poverty for the poorest households.

Suggested Citation

  • Shahidur Khandker & Gayatri Koolwal, 2010. "How Infrastructure and Financial Institutions Affect Rural Income and Poverty: Evidence from Bangladesh," Journal of Development Studies, Taylor & Francis Journals, vol. 46(6), pages 1109-1137.
    • Handle: RePEc:taf:jdevst:v:46:y:2010:i:6:p:1109-1137
    DOI: 10.1080/00220380903108330
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    References listed on IDEAS

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    1. World Bank, 2003. "Bangladesh - Development Policy Review : Impressive Achievements but Continuing Challenges," World Bank Publications - Reports 14669, The World Bank Group.
    2. World Bank, 2002. "Poverty in Bangladesh : Building on Progress," World Bank Publications - Reports 15303, The World Bank Group.
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