Assessing the Impact of Road Infrastructure on Poverty Reduction in Developing Economies: The Case of Nigeria

Infrastructure development seems appealing. However, few micro studies investigated the effect and channel of physical infrastructure on household’s living standards. We addressed these issues using road infrastructure in kilometers on Nigeria’s panel data. Infrastructure development measured as stress-free access to road is found to have significant direct effect on “within” households’ well-being. However, the results for the isolated and non-isolated households in the entire economy and conflict-free zones are the same based on distance-quartile. In contrast, the conflict-prone zone’s result is different and contrariwise. But, these outcomes suggested that not-too-distant households are better off, although from an unfamiliar viewpoint.

public expenditure to GDP at current factor cost and per capita income. The Global Competitiveness Report orders Nigeria's infrastructure at the bottom is 132 out of 138 nations. Similarly, according to the executive opinion survey of the World Economic Forum [2], the inadequate supplies of infrastructure appear to be the number one restriction to trade in the country. The Federal Republic of Nigeria's Economic Recovery and Growth Plan [3] complements the information that the "substandard infrastructure" is one of the principal factors that subverts development outcomes in the past.
As far as infrastructure is concerned, we limit the definition to physical infrastructure. It encompasses transportation, energy, water and sanitation, besides information and communication technology [4]. Out of these four categories, we focus on an aspect of transportation. The forms of transportation in Nigeria are roads, railways, inland ports, pipelines for transport of natural gas, and the air transports [5]. Our center of attention is the road. Its development has been the order of the day in Nigeria perhaps, because of the general recognition that it reduces the effect of distance, hence helping to connect the national market and facilitates business which consequently reduces poverty. The justifications for this definition include among others, on the one hand, the fact that economic activities in Nigeria thrive remarkably on the use of roads.
Among all forms of transportation in Nigeria, the road sector accounts for almost 90 per cent of all internal and cross-border freight, and passenger movements [5]. The rationale behind that is the flaw in other forms of transportation, specifically the railway [6]. However, as discovered in policy paper [5], high priority has been given to the development of all the forms of transport infrastructure: to close infrastructural gaps, to accelerate economic transformation for the country, and to attain the Vision 20:20. Recently, the Chinese government also made the pledge of US$6 billion for the funding of infrastructure in Nigeria [7]. Moreover, not long ago, Nigeria's government released the sum of 1 trillion-naira capital funds for road construction and rehabilitation among others. It is necessary for the government to invest more in infrastructure, most especially roads to explicitly pursue development with regards to inclusive growth as well as poverty mitigating policies in the whole economy [8] [9].
On the other hand is the availability of reliable and dynamic panel data which captures our definition of infrastructure at the household-level. The poor state of the road's connections and bridges are widespread. An in-depth study of the surveyed household's responses to the questionnaires reveals that they lack access to primary amenities such as roads, employment opportunities and also in participating in political activities. Hence, they are the "accessibility poor" as discovered in Seetanah et al. [10].
Many people, policymakers and studies [10], believe firmly that the poverty reduction effect of infrastructure development passes through economic growth (an indirect channel) mainly because it generates the resources to raise incomes.
In the actual sense of the economy, this is disputable because not only do the few appropriate the generated commonwealth to themselves but also the raised incomes are not well distributed, thus leaving the masses to pine in penury.
Seetanah et al. [10] stated that the effect of economic growth on poverty reduction would be smaller or insignificant if the economic growth and the worsening distribution of income are associated. Today, Nigeria is one of the fastest growing developing countries in the world with a high poverty level, and worsening distribution of the income or wealth. That is, the distribution of income or wealth created by many, strictly shared into the pocket of the few. However, the existing pieces of literature on the poverty reduction effect of road development remains vague, particularly regarding the cause-effect channels. There are shreds of empirical evidence on why infrastructure development might be the most revolutionary not only in reducing poverty but also in tackling other development issues. Given the finite commonwealth and many development challenges, there is a need to: substantiate not only the poverty-reduction effect but also the channel to the effect; and make a wise decision on the location of infrastructure. Hence, the question is not only if the scaling-up of infrastructure, specifically "road infrastructure" mitigates poverty, but also is the valid pathway of this area of intervention to poverty reduction at the household-level. This study aims at dealing with these two distinguishable but related problems by developing an existing analytical framework, and using a rare panel data and methods to conquer part of the applied issues.
Two main research issues are noticeable. On the one hand, is the strain in obtaining reliable proxies for roads. There are three proxies for infrastructure availability which are the local road quality/density, the travel distance to the destination, and the travel time to destination. However, the availability of infrastructure does not translate to its accessibility [11] [12]. Hence, in this study, we used the second measure based on Pouliquen's work [13] that the ability of the poor to access available infrastructure facilities services is a crucial issue. The distance to the nearest main roads depicts destinations in this study because it is self-evident that many productive and economic activities happen on the major road's sides. Besides, the major roads lead to various workplaces be it on the farm or off-farm. Therefore, if the access to road is inadequate, then poorer households in less-developed communities cannot benefit from economic activities and services such as school and health centers [14]. The access rates to infrastructure affect not only marginalization and inequalities but also poverty.
On the other hand, is the problem of conquering the promising source of endogeneity emanating from the non-random placement of roads. Innumerable studies not only at the macro-level but also micro-level which investigated the effect of infrastructure on poverty did not tackle the endogeneity problem of at- The results indicate that poverty alleviated directly for households with reduced road access in kilometers. Besides, increased road access in the rural areas also led to higher poverty reduction in the urban areas. We also found that not-too-distant households to the major roads in conflict and less violent conflict areas contribute more to within household's per capita consumptions.
The synopsis of this paper proceeds as follows: The second part develops the analytical framework and also the relevant empirical evidence. The third part unfolds the data issue and methodology. The fourth part presents the results, empirical findings, and the discussion. Finally, the fifth part offers the policy recommendations.

Analytical Framework
We followed the Ali & Pernia's framework [18] in which the channel through which road infrastructure leads to poverty reduction could be either director indirect. On the one hand, if the determinants operate through the employment that gives wages to the poor, then the pathway to poverty reduction is a direct (income) effect. In addition, if the determinants operate through economic growth which influences the supply and prices of primary goods to the poor, then the pathway to poverty alleviation is an indirect (growth) effect. We focused on the direct channel because other channels are less controlled by the poor but more by the few who pocket the contribution of infrastructure to economic growth, thus diverting the gains intended for the poor.
To achieve our aims, we construed the definition of poverty as the one connected to household's real consumption per capita following Ali & Pernia [18].
Hence, the direct effect of infrastructure on poverty outcomes will be contingent on the changes in the enumerated determinants. Road infrastructure can help to alleviate costs in term of shorter transiting distance in kilometers spent by households. A pertinent instantaneous effect of road infrastructure development is job creation, economic diversification, and more income as presented in Ali & Pernia [18], Gachassin et al. [15], and Howe [19], which directly augments households' real consumptions per capita, hence better economic well-being. By assumption, households' access to major roads increases the economic worth of agricultural and non-agricultural employments or outputs, generating high households' wages, hence poverty reduction.

Empirical Evidence
Several studies have investigated the connection between road infrastructure and poverty reduction. However, evidence in developing economies including Nige-  [20].
Runsinarith [21] considered government investments in irrigation, road, electricity and mobile phone in two provinces in Cambodia and found that the infrastructure variables directly reduced poverty incidence. In Tanzania of paved roads appears statistically significant from a macroeconomics perspective [10]. Lately, Ali et al. [11] [12] study on road transport infrastructure and welfare in Nigeria showed that lessening the transport costs would yield significant multi-dimensional gains through the source of income and location on the one hand. It also decreased the likelihood of being multi-dimensionally poor.
This study has a connection with the existing pieces of literature and the ongoing discourse on the link between the poverty-reduction effect of road infrastructure. From our view, one of the reasons for this discourse is because of the inconclusiveness regarding cause-effect evidence. Moreover, the indirect (economic growth) channel of the proposed analytical model has in the actual sense not translated into poverty reduction.

Data
The dataset used in this study emanates from the World Bank Microdata Li-

Choice of Variables
Household's welfare indicators were construed using log of nominal consumption per capita as used in Gachassin et al. [15], Runsinarith [21], and also poverty status dummy as used in Fan, Nyange, Rao, & others [22]. Following this method, we were able to keep both the continuous and discrete dependent variables aspoverty measures. We proxied the access to the road by the household's distance to the nearest major roads in kilometers. We also controlled for the direct pathway variables: employment and wage. Household's employment is a dummy variable on whether households are working, be it in agriculture or non-agriculture sectors, or not, and each household wage is proxied by households' savings, a dummy measure of households with another source of income or not. Household's characteristics which are the household's head level of education, marital status, gender, and age, the household size and, the households' location dummy, etc. were also included as controls.
The household's living standard measures, could be proxied by many indicators such as the per capita income and consumption, the inequality and the FGT poverty measures etc. However, household's consumption per capita seems more accurate in the existing literature in developing countries. Therefore, we used it as number one measure of poverty in this study. Following from Carlos, Cantó, Del Río, & Sarabia's study [24], consumption per capita is less explosive compared to incomes. Likewise, its use lessens the likelihood of classifying households wrongly into poor and non-poor status. Furthermore, during the survey periods, the probability of underreporting consumption is smaller when compared to the income figures. Lastly, this measure reflects long-run wellbeing.
Indeed, it illustrates household's potential to meet their essential needs and also

Methodology
The choice of variables is not only based on the Proofs from the existing literature but also on the availability of a self-evident analytical framework that traces the links. As a result, we evaluated and reported a multivariate regression model that combined different panel data models. This study investigates the analytical framework on the link between infrastructure development and poverty reduction within the Nigerian households. The yardstick model is the Kongens [25] log-log pooled linear regression model. We pooled the two waves to make the presentation easier and also to accommodate more information. Below is the pooled regression model for this study: More limitations of this method are present in Johnston [27] and Kennedy [28] textbooks. However, the promise of the panel structure and the time order of the data set is to lessen these challenges because it helps to control the time-invariant effect, and also the unobserved heterogeneity. It is likely that the unobserved factors ( I α ) correlate with the independent variables hence we estimated the fixed effects specification validated by the Hausmann test which disregards the random effect model (P < 0.0001). Therefore, the conventional fixed-effect specification has the following structure: I α ⇒ individual-household, time-invariant well-being outcomes, and it η ⇒ the error terms following from Johnston [27]. The specification examines mainly the well-being changes for each household over time, the termed within transformation. However, it has its demerit because all time-invariant variables collapse into the error term [29].
The conditional logit fixed effect specification aims at the variation in observed data within households across time [30]. In this specification, we used households interviewed at least twice. The method is contingent on two conditions. On one hand, the response variable must be proxied by at least two occa-

Relationship between Variables
Although the datasets used in the study are publicly available for the period between 2010 and 2016, we considered the periods for which we have a reliable panel structure of the datasets. Besides, the study concern road infrastructure which development has been sluggish and slow over the year. Although, in the last 15 years, subsequent governments have been making efforts on its provisions could do within the economy, however, issues remain intact. Urban congestion and poverty are very high, resulting from the uneven development of road between the rural and urban areas, with a high concentration on the latter.
On the other hand, the neglect of the rural areas may also have worsened their productivity and livelihood. About 70% of Nigerians live in rural areas. The rural dwellers face challenges in the form of difficult access to facilities and amenities to enhance their income and living standard, besides worsened poverty situation. Hence, the question is whether road infrastructure contributes to poverty reduction, if yes, through which channels?  and 2013 in the average distance of the non-poor households to the major roads.
In this same area and between the same period, there is also a significant fall from 6.3 km to 2.5 km in the poor household's distance on the average to the major roads.
There is as well a significant fall in the rural non-poor households' distance on the average to the major roads from 16. Finally, the households size variable shows that those with little members contribute more to consumptions, and households with a large number of individuals are expected to be the poor.
The correlation matrix, as shown in households with jobless members are expected to be poor but also the ones with working-class members based on the measures of well-being in this study.

Household's Consumption Effect of Infrastructure Development
The results of the pooled regression and the unconditional fixed-effects estimations are under Table 3. The results of the conditional logit fixed model are also under Table 4. The analysis of the result in Table 3 and Table 4  As expected the household's head marital status has a negative association with the household's consumption per capita. The fact that marital status is an important determinant of household's size which in turn significantly affects the ability of a household to enjoy higher well-being can be used to explain that.
Thus, we noted that the household's marital status "not married" implies higher household's consumption per capita. The sign of the household's head gender took another direction with the household's consumption per capita. Our results show that the female-headed households contributed more to the household's consumption per capita than their male counterpart. However, the marital status tion is an essential determinant of labor output which is an important area of influence that significantly affects the poor household's ability to contribute more to consumption per capita from their wages and savings through enhanced road.
The direct passage of effect variables that is labor force and savings as exemplified in our analytical framework are also statistically significant. They both positively contributed toward higher household's consumption per capita. The labor force variable for each household shows that a 10% increase in each household's labor force raises each household's consumption per capita by 4%, hence poverty reduction. Besides, the degree of responsiveness of the within household's consumption per capita to each household savings is 7%. It means that when each household savings increases by 1%, consumption per capita increased by 7%. Afterwards it is the household's area of residence. The coefficient value for rural-urban dummy is negative and statistically significant at 1%. It shows that irrespective of household's consumption per capita, a 10% likelihood of movement from the urban to the rural areas, lead to a 30% increase in each household's consumption per capita in the urban areas. It indicates that poverty is an urban phenomenon as the results indicate that migration from urban to rural areas lessen within household's poverty. It is in line with Ogun [20] which revealed that poverty site of concentration is the urban area.
There exists a statistical significance but negative effects which is found to be consistent with the arguments that a stress-free distance to the major roads has a significant poverty-reduction effect. The results show that a 10% decrease in households' distance to the major roads in kilometers raised their consumption per capita by 1%, implying a household with a better proximity in term of access to major roads has a higher consumption per capita, hence less poverty burden.
The Fan et al. [22]; Gachassin et al. [ Table 4 presents the semi-elasticities estimates using some covariates with the poverty status of the households from the conditional fixed effect approach. The odds ratio coefficients from the method cannot offer the marginal effects because they ignore the confidence interval. Besides, they are also misleading and

Infrastructure and Household's Consumptionin Conflict-Prone and Conflict-Free Zones
To further examine the effect of infrastructure development on household's consumption per capita, we partitioned the data set according to conflict-prone zone (North East) and conflict-free zone (other 5 zones together) within Nigeria.
In Nigeria, there are six geopolitical zones. Following the historical path, one out of all is a conflict-prone zone. It is a unique geopolitical class frequently affected by Boko-Haram insurgencies, an armed conflict which led to the death of many people and the deliberate destruction of infrastructure. Boko-Haram insurgencies became an issue of concern in Nigeria from the beginning of periods under consideration for this study. Based on the partition, we examined the effect of road development on the continuous dependent variable. Table 5 presents the estimates of the fixed effect approach for the conflict-prone zone. The distance to the major roads for the not-too-distant and the too-distant households is statistically significant at 5%. In the conflict-prone zone, the elasticity of the household's consumption per capita to the distance to the major roads for not-too-distant and too-distant households are 0.36 and negative 0.39 respectively. The elasticities indicate that when the distance to the major roads increases by 10%, the household's consumption per capita increased by 36% for the latter, and reduced by 39% for the former. It means that living too close or too far to the major roads in a less secure area is detrimental to household's consumption per capita. Hence, from the road development perspective in the conflict-prone area, near-exclusion is beneficial, but isolation is also harmful to the household's well-being. Although, the results contradict     only did we present poverty-reduction effect of infrastructure development but also its passage to the effect spanning the period from 2010 to 2013. We also address the endogeneity problem of the non-random placement of infrastructure using a reliable panel data method. We found that enhanced road infrastructure directly alleviated poverty. Infrastructure development proxied by the distance to the major roads was highly rewarding especially because of the savings from the wages of the employed households not-too-distant to the major roads which are sufficient to meet up with their consumption per capita say, during emergencies hence poverty reduced. We also found a seemingly interesting result on household poverty reduction effect of urban-rural movement following from infrastructure development. It indicates an increased per capita consumption for urban households. The insight is that there were over-congestion and high household poverty in the urban areas, the consequence of the available better road infrastructure in the urban areas and worse road amenities in the rural areas. However, we supposed an enormous investment in better roads in the rural areas during the periods of study which motivated urban-rural migration. Therefore, household's displacement from the urban to the rural areas was helpful in reducing urban poverty.

Conclusions and Policy Recommendations
At the same time, we presented the effect of infrastructure development on the well-being of each household in the conflict-prone and the conflict-free settings within Nigeria. The intuition is that proximate access to the major roads and total exclusion appears to be dangerous for the well-being of each household in a conflict-prone zone unlike in the conflict-free zones. Moreover, western education should be banned to end armed-conflict issue in the North-West but under the strict condition that the perpetrators won't move to the conflict-free zones to make the same request. With that, western education violent conflict-induced could become an issue of the past not only in the conflict-prone zone but also in the country as a whole.
From the infrastructure development perspective, our study clears the ground on the issue of high poverty level in the face of high economic growth in Sub-Saharan Africa, specifically in Nigeria. In short, it supports the fact that economic growth has not translated into poverty reduction at the aggregate level. However, at the micro-level, our study shows that high employment opportunity creation through infrastructure development implies high poverty reduction. Hence, it is high time the Nigerian government, and its policymakers, started applying logic in dealing with the specific economic issue by putting attention on both aggregate and individual economic agents.
We suggest that high priorities be given to the development of road infrastructures to reduce poverty directly to its minimum. Evidences from countries such as Ghana and Tanzania confirmed and supported our suggestion. The infrastructure construction should be in such a way that they will provide easy access to other locations, and other facilities.