THE WORLD BANK GROUP A World Free of Poverty

Poverty Reduction and Social Assessments

Overview Encouraging Small-Scale Contractors
Transport and Poverty Beneficiary Participation
Importance of Non-motorized Vehicles Labor Redundancy Issues
Easing the Burden of Transport Link to Poverty Analysis & Transport Projects
Labor-based Methods Selected References


This topic deals with the issue of incorporating poverty reduction in transport sector projects. It deals with issues that should be considered at planning, designing and implementation stages of transport projects emphasizing poverty reduction. The Knowledge base covers the economic linkage between transport and poverty, importance of non-motorized transport, easing the burden of poverty, using labor-based methods, encouraging small-scale contractors, promoting beneficiary participation and addressing labor redundancy issues to ensure that project formulation and implementation are designed to assist all members of society.

Transport is rarely considered as an explicit part of Bank's direct poverty reduction strategies. It has no special claim as a cost-effective policy instrument for the redistribution of welfare to the poor. Transport reduces absolute poverty mainly by increasing economic efficiency-by lowering costs and prices and enhancing opportunities. However, transport sector operations have enough scope to address poverty issues in their project design. The objective of this document is to provide guidelines to identify the potential role of transport interventions in reducing poverty.

The following list focuses on the key issues that you need to know about poverty reduction and social assessments in the transport sector to ensure that the sector plays an active part in incorporating and successfully addressing a poverty reduction component in its projects. The knowledge base covers the linkage between transport and poverty, importance of non-motorized transport, easing the burden of transport, using labor-based methods, encouraging small-scale contractors, promoting beneficiary participation and dealing with labor redundancy issues in transport projects.

Key Issues

  1. Transport and Poverty

    In context of Bank's objective to reduce poverty through sustainable economic development, the most important question that should be addressed within the transport sector is: How can transport operations be designed to ensure that they contribute effectively to poverty reduction? To place the role of transport in perspective, both indirect and direct approaches to poverty reduction should be kept in mind. To learn more about direct and indirect approaches, see Poverty and Transport, Gannon and Liu, Chapter 2. To read examples of Bank projects where poverty reduction has been a component of transport projects, see China: Tri-provincial Highway Project, 1998, PAD, p. 47 in Gannon and Liu. Poverty and Transport.

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  2. Importance of Non-motorized Vehicles

    Non-motorized transport is heavily used by the poor, both in urban and rural areas. Walking is the most common form of NMT. Other non-motorized means of transport include bicycles, rickshaws, hand carts, wheel barrows and animal drawn carts. Transport interventions that promote the use of NMT and IMT(intermediate means of transport) usually contribute directly to the welfare of those people who cannot afford motorized transport. To learn more about the role and economics of intermediate means of transport, see Ian Barwell's "Transport and the Village." NMT is, many times, also the most appropriate and efficient form of transport, especially when there is a need to move small parcel loads between farms and local markets and capital resources are scarce. In such circumstances it is better to finance components to provide some intermediate means of transport or non-motorized transport, which is affordable, rather than having no provision for improving accessibility. Want to know more about Bank programs where NMT has been introduced? See Infrastructure Note RD-3.

    Two aspects of NMT - flexibility and affordability-illustrate its usefulness when access is limited. NMT provides a flexible form of transport where it is needed most- in activities that are essential to the basic quality of life. NMT is a multipurpose tool that can be used for the door to door transport of persons and goods with improved travel time and route options. Hence, integration of NMT in transport strategies is a powerful tool for targeting and reaching the poor. Want to know more about integrating NMT in transport strategies? See Infrastructure Note UT-4. In many countries where geographical terrain makes construction of motorized roads very costly and thus unlikely in the near future, the non-motorized transport component is an effective way of reaching the most isolated and poor. In such cases, financing the rehabilitation and maintenance of the non-motorized tracks is a viable option to provide access to the people of isolated regions.

    Although NMT is a viable mode of rural transport for productive activities in many countries, acquiring non-motorized vehicles can be prohibitively expensive . The improvement of rural transport access often requires NMT vehicles to complement rural road investment. Recognizing this some Bank projects finance loans on terms that would enable poorer households to purchase NMT vehicles.

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  3. Easing the Burden of Transport

    Shortage of affordable transport has direct impacts on the personal welfare of travelers by increasing accessibility and making their daily trips to work, school , health facilities or recreational facilities easier and more comfortable. In many low-income countries, particularly in African countries, women are principal producers and marketers of food. The domestic and agricultural transport activities of women, plus those trips associated with health care and use of markets, are essential to the reproductive and productive well-being of the household. To learn more about the transport burden on rural women, see Ian Barwell's "Transport and the Village" (7,940KB PDF). Many of them are not able to afford bicycles or carts. They rely on head portage to carry their produce to market. Read more in "A Case Study on Intermediate Means of Transport Bicycles and Rural Women in Uganda," SSATP Working Paper No. 12, Christina Malmberg Calvo.

    The use of an IMT could reduce the transport burden on women directly by reducing time and effort dedicated to transport and indirectly, by transferring the transport responsibilities to men. Reducing the transport burden of rural women would release their time and energy for more productive and socially beneficial activities. Ensuring the benefits of transport interventions reach women requires foresight and attention to component design during project planning. It needs to be ensured that the choice of IMT intervention is consistent with women's needs, cultural beliefs and economic resources. The full benefit of road projects that link villages to markets cannot be realized unless potential users, and women, in particular, overcome the cost barriers involved in the use or purchase of alternative intermediate means of transport. Read more about the importance of credit in promoting IMTs in "Promoting Intermediate Means of Transport," SSATP Working Paper No. 20, Christina Malmberg-Calvo). Women can benefit from road works as well. Measures to make it possible include disseminating awareness, extending eligibility conditions and training women to take supervisory positions.

    The World Bank experience suggests that the beneficial impacts of transport infrastructure on women can be profound. For example, an ex post impact study of a World bank financed rural road paving project in Morocco revealed that a major impact of the project was on girls enrollment in primary education, which more than trebled in the project zones a few years after the completion of the project. To read more about this impact study, see "Kingdom of Morocco: Impact Evaluation Report: Socioeconomic Influence of Rural Roads, World Bank, Operations Evaluation Department", Hernan Levy, 1996.

    In addition to women certain other groups in the society are also transport disadvantaged. These groups are constituted of the elderly, the handicapped and children. These groups have special transport needs which have to be identified and addressed. Transport sector interventions have tried to provide solutions for the transport disadvantaged via schemes of subsidized fares and providing tertiary public transport services. Fostering private, small-scale public transport that could be well suited for occasional trips to markets, health clinics and other public centers would make such facilities more accessible. In Harare, for example, there are emergency taxis that deviate from fixed routes to drop off passengers and run on flexible schedules. In developed countries, schools, hospitals and social service departments operate extensive transport services to accommodate the population they serve.

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  4. Labor-based Methods

    The term "labor-based" is used to describe works where, although mechanical means are possible, primarily labor is used, for example, the construction of culverts, graveling, and surface and formation construction. Although some tasks cannot be done adequately by hand, for many tasks labor-based methods can be cheaper and more reliable than capital-intensive works. Importantly, the use of labor-based methods can generate income-earning opportunities for the poor. Therefore, these methods for road work not only rehabilitate roads in a cost-effective manner but they can be used to achieve poverty reduction benefits as well. The benefits of labor-based methods extend beyond the savings in the cost of road work and creation of jobs. Other benefits include savings on foreign exchange, injection of cash into the local economy and transfer of knowledge of road works to local communities. These reinforce the sustainability of road maintenance activity. To learn more about labor-based methods, click below:

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  5. Encouraging Small-scale Contractors

    The labor-based methods can be implemented either by using established contractors (as in South Africa) or by developing small-scale contractors (as in Ghana, Tanzania and Zambia). The advantages of using existing contractors are that they can pay laborers on time, do not require a long development horizon, require few institutional changes and have low performance risks. The disadvantages are that established contractors resist substituting labor for capital. Developing small scale contractors is the only viable option for expanding labor based methods. The benefits of labor-based methods will not be realized unless programs are designed to make the working environment favorable to their use, recognizing that contractors base financial comparisons between labor and equipment based methods on a variety of factors. Want to know more about these factors and how to develop successful labor-based contractor programs? See Infrastructure Note RD-21.

    A low cost, labor intensive approach to routine road maintenance in Colombia may be a useful model that can be applied in other countries. Here, the contracts of labor cooperatives involved in road maintenance were rewritten( after the public sector reform) to strengthen the concept of them as contractors. This was done by introducing maintenance standards, with a system of sanctions for non-achievement and to match contract per kilometer rates to the number of members and to the relative difficulty of road maintenance in their section. However, the labor-intensive nature of the operation was retained, to turn into an effective labor-intensive, contractor based program. In some road projects financed by the Bank, for example, the Rural Roads Rehabilitation and Maintenance project in Peru, microempressa or micro-enterprises have been successfully used for road maintenance.

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  6. Beneficiary Participation

    The poor generally have little influence in the political process and this makes it important to consult potential beneficiaries to make sure that interventions are designed to meet the needs of all members of society. Consultation can be done either directly with the beneficiaries or through NGOs. It is important that solutions to transport problems are also home grown, reflecting the needs of the people. If transport projects are to have a positive impact on poverty reduction, their design must be based on a clear understanding of the local situation; should incorporate the expertise, knowledge and perception of the local community and must substantially involve them in projects' implementation. To read about the ways to stimulate the beneficiaries' participation, see "Case Study on the Role of Women in Rural Transport: Access of Women to Domestic Services," Christina Malmberg-Calvo, SSATP Working Paper No. 11) Want to see a good example where the project has made good use of community participation? (see annex 11: Second rural roads and markets improvement and maintenance project in Bangladesh)-->

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  7. Labor Redundancy Issues

    Technological change and measures to improve transport efficiency through privatization, restructuring and downsizing is likely to generate labor redundancies which, in the short-term may create new concentrated pockets of unemployed workers. The trend toward increasing private sector participation and commercialization has highlighted the central role of eliminating excess staff in allowing an enterprise to become efficient. Project conditionality now deals with this issue directly.

    Labor redundancy in public sector transportation enterprises is frequently a very serious and costly problem. Its treatment is frequently controversial from the social welfare standpoint and costly politically. However, it is critical to develop labor redundancy schemes which mitigate the effects of redundancy, for the benefit of displaced workers and getting support for privatization schemes from the society at large. Labor redundancy schemes may consist of providing adequate training, re-employment opportunities and severance financing arrangements. Want to know more about different types of labor redundancy schemes? See Viewpoint No. 174, Sunita Kikeri.

    In most road sector projects, the problem of labor redundancy might arise while restructuring road agencies. This is normally handled by tackling the problem in stages. The usual first step is to offer older staff incentives to retire early. The second step is to identify all the commercial activities within the road agency and to move them into units that can be spun off as separate commercial enterprises (for example, traffic data, civil works design, manufacture of road signs, materials testing).

    The road agency may also help in-house laborers to convert into small scale contractors. Assistance normally takes the form of training, providing credit to purchase standard sets of equipment and offering of initial trial contracts. A good example is the Ghana Highway authority, which managed to reduce its staff from 8,400 to 4,700 primarily by converting them into petty contractors.

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Selected References

Gannon, Colin and Liu Zhi. Poverty and Transport. 1997. TWU-23 Discussion Paper. World Bank.

Thampil, Pankaj, Thampil. 1991. Designing Low-cost Rural Transport Components to Reach the Poor. TWU Infrastructure Note RD-3. World Bank.

Guitink, Paul, Susanne Holste, Jerry Lebo. 1994. Non-motorized Transport: Confronting Poverty through Affordable Mobility. Infrastructure Note UT-4. World Bank.

Stock, Elisabeth. 1996. Developing Successful Labor-Based Contractor Programs: Lessons from Ghana. Infrastructure Note RD-21. World Bank.

Kikeri, Sunita. 1999. Labor Redundancies and Privatization: What should governments do? Private Sector Viewpoint Note 174. World Bank.

Malmberg Calvo, Christina. 1994. A Case Study on Intermediate Means of Transport: Bicycles and Rural Women in Uganda. SSATP Working Paper No. 12. World Bank.

Malmberg Calvo, Christina. 1996. Promoting Intermediate Means of Transport. SSATP Working Paper No. 20. World Bank.

Stock, Elisabeth A. and Jan de Veen. 1996. Expanding Labor-based Methods for Road Works in Africa. SSATP Working Paper No. 22. World Bank.

Barwell, Ian. 1996. Transport and the Village. World Bank Discussion Paper 344.

1996. Best Practices in Labor-based Construction in the Road Sector. Africa Region Findings 10. World Bank.

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