Rural infrastructure and poverty in China

Abstract

The study develops a theoretical framework of how irrigation and drainage infrastructure and rural transportation infrastructure influence poverty. Using panel data on 31 provinces in China from 2002 to 2017, this paper estimates basic and continuous difference-in-differences (DID) models to investigate the preliminary impact of irrigation and drainage infrastructure and rural transportation infrastructure on poverty and further explores the influence mechanisms of these rural infrastructures on poverty by using the mediating effect model. The results show that irrigation and drainage facilities infrastructure can directly reduce poverty. On the one hand, rural transportation infrastructure directly leads to rural hollowing out and aggravates rural poverty; on the other hand, it indirectly promotes poverty reduction by stimulating economic growth. Overall, the positive and negative effects of rural transportation infrastructure on poverty offset each other.