Pro-Poor Public Investment

Findings

Research to date has produced several important findings, in particular in Asian countries.
1. Returns to public investments vary widely across different types of investment and regions, even within the same country. This finding implies that there is significant potential to achieve more growth and poverty reduction with a given amount of investment by better regional targeting.
2. Agricultural research, education, and rural infrastructure are the three areas of public spending that are most effective in promoting agricultural growth and reducing poverty.
3. Regional analysis in Asia suggests that investments in less-developed areas not only offer the largest poverty reduction per unit of spending, but also produce the highest economic returns.
4. Government spending on antipoverty programs, such as safety nets or food subsidies generally has a small impact on poverty reduction, owing mainly to inefficiencies in targeting and misuse of funds.
5. Evidence from China shows that low-quality/low-cost types of infrastructure, such as rural feeder roads, often have the highest payoff in terms of growth and poverty reduction, per unit of investment, and a study of Uganda points to similar conclusions.

Although other findings in Africa are similar to those in Asia, regional analysis in Africa has also led to some distinct findings. For instance, research in Africa reveals that returns from public investment are high even in high-potential areas, indicating an overall lack of investment in all regions.