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Externalities in rural development - evidence for China

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  • Ravallion, Martin

Abstract

The author tests for external effects of local economic activity on consumption and income growth at the farm-household level using panel data from four provinces of post-reform rural China. The tests allow for non-stationary fixed effects in the consumption growth process. Evidence is found of geographic externalities, stemming from spillover effects of the level and composition of local economic activity and private returns to local human and physical infrastructure endowments. The results suggest an explanation for rural underdevelopment arising from under-investment in certain externality-generating activities, of which agricultural development emerges as the most important.

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  • Ravallion, Martin, 2002. "Externalities in rural development - evidence for China," Policy Research Working Paper Series 2879, The World Bank.
    • Handle: RePEc:wbk:wbrwps:2879
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    Cited by:

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    2. Giles, John, 2006. "Is life more risky in the open? Household risk-coping and the opening of China's labor markets," Journal of Development Economics, Elsevier, vol. 81(1), pages 25-60, October.
    3. Sènakpon F.A. Dedehouanou & Dugassa Aichatou Ousseini & Abdoulaziz Laouali Harouna & Jabir Maimounata, 2015. "Spillovers from Off-farm Self-Employment Opportunities in Rural NIGER," Working Papers 2015/03, Maastricht School of Management.
    4. Escobal, Javier, 2005. "The Role of Public Infraestructure in Market Development in Rural Peru," MPRA Paper 727, University Library of Munich, Germany.
    5. Farrow, Andrew & Opondo, Chris & Rao, KPC & Tenywa, Moses & Njeru, Rose & Kashaija, Imelda & Kamugisha, Rick & Ramazani, Michel & Nkonya, Ephraim & Kayiranga, Didace & Lubanga, Lunze & Nabahungu, Leon, 2013. "Selecting sites to prove the concept of IAR4D in the Lake Kivu Pilot Learning Site," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 8(3), pages 1-19, August.
    6. Shujaat Farooq & Usman Ahmad, 2020. "Economic Growth and Rural Poverty in Pakistan: A Panel Dataset Analysis," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 32(4), pages 1128-1150, September.
    7. Fassil Fanta & Mukti Upadhyay, 2009. "Poverty reduction, economic growth and inequality in Africa," Applied Economics Letters, Taylor & Francis Journals, vol. 16(18), pages 1791-1794.
    8. Barrett, Christopher B. & Swallow, Brent M., 2006. "Fractal poverty traps," World Development, Elsevier, vol. 34(1), pages 1-15, January.
    9. Sangaralingam Ramesh, 2008. "Infrastructure, Knowledge Creation and Spillovers and Economic Growth in China," Working Papers 162, Department of Economics, SOAS University of London, UK.
    10. Mariapia Mendola, 2003. "Agricultural Technology and Povertry Reduction: A Micro-Level Analysis of Causal Effects," Development Working Papers 179, Centro Studi Luca d'Agliano, University of Milano.
    11. Valdés, Alberto & Foster, William, 2010. "Reflections on the Role of Agriculture in Pro-Poor Growth," World Development, Elsevier, vol. 38(10), pages 1362-1374, October.
    12. Zhu, Nong & Luo, Xubei, 2008. "The impact of remittances on rural poverty and inequality in China," Policy Research Working Paper Series 4637, The World Bank.
    13. Zhu, Nong & Luo, Xubei, 2006. "Nonfarm activity and rural income inequality : a case study of two provinces in China," Policy Research Working Paper Series 3811, The World Bank.
    14. Kuyvenhoven, Arie, 2004. "Creating an enabling environment: policy conditions for less-favored areas," Food Policy, Elsevier, vol. 29(4), pages 407-429, August.
    15. Luc Christiaensen & Lionel Demery & Stefano Paternostro, 2003. "Reforms, Remoteness and Risk in Africa: Understanding Inequality and Poverty during the 1990s," WIDER Working Paper Series DP2003-70, World Institute for Development Economic Research (UNU-WIDER).
    16. Mariapia MENDOLA, 2005. "Agricultural technology and poverty reduction: a micro-level analysis of causal effects," Departmental Working Papers 2005-14, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.

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