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    • Among international works that empirically

    2018-10-25

    Among international works that empirically tested the role of infrastructure in the fight against poverty, we should mention those of Jacoby (2000), Runsinarith (2008), Roy (2009), Ogun (2010), Seetanah et al. (2009), Escobal and Ponce (2001) and Aparicio et al. (2011) among others. In the local environment, economics literature on the impact of direct public investments in infrastructure for poverty muscarinic agonist purposes is mainly covered by the works of Cruz et al. (2010) and indirectly, by the Kageyama and Hoffmann study (2006). With this perspective, considering the temporal effect of poverty and using state-provided data, this article analyzes if the results of infrastructure investment policies have affected the dynamics of poverty in Brazil from 1995 to 2011. For this purpose, we applied a dynamic panel data model that uses the Generalized Method of Moments (GMM) developed by Arellano and Bond (1991), Arellano and Bover (1995) and Blundell and Bond (1998). Additionally, the Granger Causality Test was applied for Hurlin and Venet panel data (2001, 2004) and Hurlin (2004, 2005) which validated results by revealing that infrastructure is an efficient tool to fight poverty. This test points at both the existence of this tool and the causality link between poverty and infrastructure. The most common way to measure poverty, because of its simplicity, is the setting of a poverty line, in other words, an income level below which people are classified as poor. The poverty line used is made available by the IPEA (Institute of Applied Economics Research) and its value is equal to half minimum monthly salary according to prices of September 2009. The calculation of this line follows the Corseuil and Foguel method (2002). The indicator used to measure absolute poverty was the proportion of poor people. The remaining of the article is organized in seven sections. Section 2 reviews the relation between public investment in infrastructure and poverty. Section 3 analyzes poverty determinants. The fourth section introduces a discussion on the database and the construction of model variables. In the fifth section we specify the econometric model and discuss the Granger Causality Test for panel data. In the sixth section, estimated econometric data and the Granger Causality Test data are analyzed. The last section draws the final conclusions.
    Theoretical and empirical aspects of the relation between poverty and infrastructure In its theoretical studies, Hirschman (1958) states that public investment in infrastructure is vital for the social and economic development of a country, once it provides an attractive environment for private investments, thus making services cheaper and more competitive and therefore supporting all other economic activities. The infrastructure components that exert the highest influence on the systemic competitiveness of companies are related to the offer of energy, transportation and telecommunications. The offer of these components plays a key role in those states that offer it at low cost in an efficient, regular and reliable way. According to Hirschman (1958), infrastructure is composed of basic services such as the judiciary power, education, public health, transports, communications, water and electricity supply and the agricultural support in services such as irrigation and drainage. With regards to international empirical evidence, there are several works that estimate the impact of infrastructure in poverty reduction in many countries. A case study with data on Nepal’s population living standards was developed by Jacoby (2000) for the years 1995 and 1996. The study found that the construction of market access roads offered substantial benefits to poor families. However, such improvement was not consistent enough to significantly reduce income inequality. The role of roads as one of the factors that contribute to affect poverty incidence was studied by Kwon (2001) in 25 Indonesian provinces between 1976 and 1996. With the use of instrumental variable techniques, results showed that the significant effect that roads exerted on poverty reduction was higher in provinces with good road access than those that did not have such infrastructure.