Here is an interesting paper [warr-aares-2007.pdf] about the potential role of road building in poverty alleviation in Laos. The Australian National University’s Peter Warr uses general equilibrium modelling to argue that “road improvement does reduce poverty but that the quantitative impact depends heavily on the types of road that are provided and the areas in which the road is located.” Here is the paper’s conclusion:

Our analysis indicates that reducing transport costs through rural road improvement generates significant reductions in poverty incidence. It does this through improving the income earning opportunities of rural people and through reducing the costs of the goods they consume. A feature of our results is that when no vehicle access areas are provided with dry season access roads (dirt and gravel), the reduction in poverty incidence is about 17 times the reduction that occurs when dry season access only roads are upgraded to all weather access (paved and improved gravel) roads. The ratio of the effect on GDP is about 6. Reducing transport costs for households without road access is highly pro-poor.

These results do not demonstrate that road improvement should be shifted away from upgrading dry season access roads to providing road access to villages currently lacking it. Both forms of road improvement are important and both contribute to overall poverty reduction. Moreover, the costs of road building in the two cases need to be taken into account in determining the most appropriate road building strategy. It is likely that the cost per kilometer of providing road access where there is currently none is bound to be significantly higher than upgrading existing roads. This paper has not looked into these costs but this is an important area that future research could address. However, our results confirm that there is considerable scope for reducing poverty incidence in Laos by reducing rural transport costs through improving the quality of rural roads.

There is considerable potential for discussing the other social and cultural impacts of road building, but Warr’s argument is one that will make a lot of sense to many observers of local development in the region.