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Poverty

The need to improve transport impact evaluations to better target the Bottom 40%

Julie Babinard's picture
In line with the World Bank’s overarching new goals to decrease extreme poverty to 3 % of the world's population by 2030 and to raise the income of the bottom 40% in every country, what can the transport sector do to provide development opportunities such as access to employment and services to the poorest?

Estimating the direct and indirect benefits of transport projects remains difficult. Only a handful of rigorous impact evaluations have been done as the methodologies are technically and financially demanding. There are also differences between the impact of rural and urban projects that need to be carefully anticipated and evaluated.

Can we simplify the methodologies?

Despite the Bank’s rich experience with transport development projects, it remains quite difficult to fully capture the direct and indirect effects of improved transport connectivity and mobility on poverty outcomes. There are many statistical problems that come with impact evaluation. Chief among them, surveys must be carefully designed to avoid some of the pitfalls that usually hinder the evaluation of transport projects (sample bias, timeline, direct vs. indirect effects, issues with control group selection, etc.).

Impact evaluation typically requires comparing groups that have similar characteristics but one is located in the area of a project (treatment group), therefore it is likely to be affected by the project implementation, while the other group is not (control group). Ideally, both groups must be randomly selected and sufficiently large to minimize sample bias. In the majority of road transport projects, the reality is that it is difficult to identify control groups to properly evaluate the direct and indirect impact of road transport improvements. Also, road projects take a long time to be implemented and it is difficult to monitor the effects for the duration of a project on both control and treatment groups. Statistical and econometric tools can be used to compensate for methodological shortcomings but they still require the use of significant resources and knowhow to be done in a systematic and successful manner.

São Paulo and Mumbai: Improving Mass Transit in Two BRIC Megacities

Jorge Rebelo's picture
Mumbai and São Paulo are two mega metropolitan regions (MMR and SPMR) in the BRICs with about 20 million inhabitants each. They are the economic engines of their respective countries and act as a magnet for rural, low-income populations seeking employment opportunities, growing at a rate that puts tremendous pressure on their transport infrastructure and other public utilities.

As population and income rise, car and motorcycle ownership quickly increased in both megacities while mass transit is not developing fast enough, with serious consequences on traffic congestion, accidents and pollution. São Paulo has 150km+ traffic queues daily and losses of productivity, wasted fuel, health impacts and accidents estimated at around 2% of Brazil’s GDP in 2013, with three fatal deaths daily in motorcycle accidents alone. Mumbai, in addition to all-day road traffic jams, have an astounding six deaths daily from riders hanging and falling from packed trains which circulate with open doors to avoid reducing carrying capacity. The city comes to a standstill when the rail right-of-way is flooded by heavy monsoon rains. 

Access to jobs and basic services in both mega-cities is extremely difficult – particularly for the poor, who often live far from major employment centers. The two cities need to act quickly and take drastic measures to improve mobility and access... But this is easier said than done: expanding the transport infrastructure in these megacities requires careful planning, massive investment,  and may also involve relocating large numbers of people and businesses.

Is Public Transport Affordable?

Julie Babinard's picture
When planning transport systems in developing countries, one of the main challenges is to evaluate the proportion of income spent by poorer households on transport as well as in understanding transport patterns in relation to residential location, travel distance and travel mode. High real estate prices in urban centers often force low-income households in developing countries to live farther out in the periphery, with consequences on the way urban agglomerations develop and with subsequent effects on the levels of motorization, congestion, local air pollution, physical activity and the expansion of urban poverty.

"¿Me lleva por 1000 pesos?" – Subsidios al transporte público para los pobres

Camila Rodriguez's picture
En nuestra revisión del proceso de modernización del transporte público en Bogotá, hemos leído una gran cantidad de análisis técnicos de los modelos de negocio, riesgos e incentivos en los contratos, temas operacionales, pero esta súplica por un pasaje reducido, "¿me lleva por 1000 pesos" ( la tarifa normal es de 1400 pesos) que aproximadamente el 23% de los pasajeros de los buses en Bogotá a veces le pide al con

“Will you take me for a 1,000 pesos?”— Making sure public transport subsidies really target the poor

Camila Rodriguez's picture
Also available in: Español

Follow the authors on Twitter: @TweetingCamila and @shomik_raj
 

A commuter in Bogotá, Colombia
(World Bank)
When analyzing the modernization of Bogota’s extensive bus system, we read a lot of technical analyses on public transport business models, risks, incentives, etc. But in a city where 11,6% of the population lives below the poverty line, social reality trumps all theoretical studies. In a new report entitled The promise and challenges of integrating public transportation in Bogotá, experts from Embarq estimate that as many as 23% of bus users sometimes plea for discounted rides, asking the bus driver: “Will you take me for 1,000 pesos?”

This situation points to one of the toughest challenges faced by public transport systems: how to reconcile financial sustainability and social inclusion? On the one hand, if fares do not cover operational costs, systems need subsidies to survive, which can pose serious financial and political risks. In some cases, transport systems operating with inadequate financial resources may experience system deterioration, safety problems and service curtailment. On the other hand, if fares are set to reflect the real price of transport services so that operators can recoup their costs without subsidies, then the poor are often priced out. This is exactly the problem that Bogotá is currently struggling with, despite its well-deserved reputation for innovation and excellence in public transport: fares of its state-of-the-art Transmilenio Bus Rapid Transit (BRT) system are pegged at cost-recovery levels that may price out many of the city’s poorest. Recent studies show that the lowest income households in Bogotá (socioeconomic strata 1, 2, 3 according to the local classification) are already devoting 20-30% of their total income to transportation, spending more than US$2 daily.  The situation may be even worse when Bogota’s city-wide public transit reform (the Integrated Public Transport System or SITP) is fully implemented, as bus drivers, with the adoption of smart cards, may no longer be able to offer unofficial discounts to passengers at their discretion, a common practice in the traditional system.

Logistics: a Critical Nexus Point for Inclusive Growth

Marc Juhel's picture
As I get ready to head back to Washington DC after a visit to The Netherlands, I don’t want to miss the opportunity to share with you some thoughts on sustainable logistics.

While some of you might be familiar with the term, transport logistics refers to the services, knowledge and infrastructure that allow for the free movement of goods and people. 

In today’s globalized economies, logistics is recognized as a key driver of competitiveness and economic development. And as policy making turns its attention to promoting sustainable growth paths, valuing scarce resources, and minimizing environmental impacts, sustainable logistics is indeed a key nexus point.

Efficient logistics systems are a precondition for regions, countries, cities and businesses to participate in the global economy, boost growth, and improve the living conditions of millions of people.

That’s why this topic is so important for the World Bank’s mission and our client countries in the transport sector. And that’s why this week in The Hague we organized, together with the government of The Netherlands and partners like Dinalog, the Dutch Institute for Advanced Logistics, our first Conference on Sustainable Logistics.

Acting Now to Achieve Accessible Transportation and Universal Mobility

Julie Babinard's picture
There is great diversity of needs among people with disabilities. Specific impairment may be linked to a physical, hearing, speech, visual or cognitive condition. And the reality is that almost everyone will face temporary or permanent disability at some point in life. This can be caused by a number of factors, ranging from disease, old age to accidents.