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Research Highlights 2007: Sustainable Rural and Urban Development


Research on rural and urban development, infrastructure, and the environment was brought together in one team in September 2006. This new team has a wide-ranging work program covering many aspects of the rural-urban space and the interactions within it. Poverty is a rural phenomenon in many countries (75 percent of the world’s poor live in rural areas), but in fast urbanizing countries poverty is increasingly becoming a predominantly urban phenomenon (for example, in much of Latin America). With climate change becoming a focus of international policy debates, the research program on this topic has been expanded significantly.


The research program on rural development reflects key operational areas of the World Bank: agricultural development in Africa, community-driven development, diversification of nonfarm rural income, land policy, rural microcredit, rural infrastructure, and water resources management.

The climate change research program investigates impacts and potential responses at the local, regional, and global scales. Urban research examines linkages between energy consumption, and pollution and carbon emissions in large cities. Rural and regional research evaluates adaptation policies in agriculture (in Africa and Latin America), possible scenarios for expanding renewable electricity supply in underserviced areas in Africa, as well as potential adaptation options for water allocation treaties in international river basins. Global work focuses on flexible coordination mechanisms among countries to reduce greenhouse gas emissions, and improve energy efficiency in transportation systems. Research on sustainable energy production includes tradeoffs among nonrenewable and renewable resources and the implications of biofuel production on environmental pollution and global food supply.

Planned environment research deals with indoor pollution, public disclosure policies on environmental performance, and the health effects of pesticides.

The infrastructure and urbanization research program highlights spatial linkages. It focuses on the role of externalities (such as agglomeration effects), public infrastructure investment, and urban management in addressing issues of lagging economic growth and urban poverty.


In the face of climate change, there is no “one-size-fits-all” solution for Africa

Even without climate change, African agriculture faces serious challenges: land degradation, inadequate irrigation, rural-to-urban migration, political instability, stagnant economies, and slow technological progress.

A research project supported by several external partners analyzed—for the first time—climate impact and adaptation in 11 African countries. The results suggest that millions of agriculture-dependent, water-deprived people in the most vulnerable countries will need information, technologies, and supporting institutions to adapt to further climate deterioration.

The effects of climate change vary significantly across Africa, and so a blanket approach will be less effective in helping farmers to adapt. The research suggests that large regions of marginal agriculture in Africa may be forced out of production by the beginning of the next century, while others will thrive.
Some countries are more vulnerable than others and help should be focused where it is needed most. For example, 90 percent of the population in Burkina Faso, one of the poorest countries in the world, is engaged in mostly subsistence agriculture and is extremely vulnerable to rainfall variation.[33]

Dryland agriculture in Latin America is likely to suffer from climate change

A cross-country study in Latin America has found strong evidence that agriculture in the region will be vulnerable to the effects of higher temperatures, but the effects are likely to vary from place to place. In the worst case, farms could lose up to 62 percent of their value by 2100, the study projects. Even under less severe temperature increases, the value lost is likely to be at least 30 percent. In the most modest scenario, the loss is estimated at about 15 percent.

The brunt of increasingly hot temperatures and dry conditions is likely to be felt by dryland farmers in Bolivia and Paraguay. Both small and large farms appear to be equally vulnerable to global warming. Farmers are likely to change the type of farm, irrigation, crops, and livestock, depending on type of climate change they face. Farmers in wet temperate locations are more likely to grow crops, those in dry locations more likely to raise livestock, and those in hot locations are more likely to grow crops and raise livestock.[34]

Countries’ stakes vary widely with respect to climate change negotiations

New research (using composite measures drawn from a geo-referenced database of indicators related to global change and energy) provides insights on the attitudes that countries are likely to display on international treaties regulating carbon emissions.

The analysis classifies countries in terms of their vulnerability along two dimensions. Source vulnerability looks at access to fossil fuels and renewable energy and the potential size of employment and income shocks following the introduction of some form of carbon tax. Impact vulnerability looks at the proneness to climate-related hazards and sea-level rise.

The findings suggest that there is enough regional clustering to warrant the adoption of regional strategies. For example, human vulnerability to weather events is much higher, in general, in South and East Asia than it is in the Middle East and North Africa. However, countries within regions sometimes vary widely in their orientation toward a global protocol, and there is a strong case for country-specific tailoring. The study suggests that mechanisms for compensation and cross-subsidy are vital when negotiating with the group of countries that have both unfavorable stakes in a global protocol and very high existing CO2 emission levels.[35]

Liberalizing land rental markets promotes growth with equity in rural areas

A study of land markets and economic performance in rural India suggests that rental market restrictions (such as the prohibition of sharecropping) reduce productivity and equity by hampering efficiency-enhancing rental transactions that benefit poor producers, a result contrary to the original intentions of policy makers.

A relaxation of restrictions would allow landless and land-poor households with high productivity access to farming or to additional land. Such measures would improve the overall productivity of the agricultural economy while reducing the inequity in income distribution resulting from the skewed initial situation. The results suggest that liberalization would increase the volume of renting-out with a significant gain in productivity.[36]



 33. Seo, Sungno Niggol, and Robert Mendelsohn. 2007. "Climate Change Adaptation in Africa: A Microeconomic Analysis of Livestock Choice." Policy Research Working Paper 4277, World Bank, Washington, DC.

Kurukulasuriya, Pradeep, and Robert Mendelsohn. 2007. "Endogenous Irrigation: The Impact of Climate Change on Farmers in Africa." Policy Research Working Paper 4278, World Bank, Washington, DC.

Seo, Sungno Niggol, and Robert Mendelsohn. 2007. "The Impact of Climate Change on Livestock Management in Africa: A Structural Ricardian Analysis." Policy Research Working Paper 4279, World Bank, Washington, DC.

 34. Seo, Niggol, and Robert Mendelsohn. 2007. "Changing Farm Types and Irrigation as an Adaptation to Climate Change in Latin American Agriculture." Policy Research Working Paper 4161, World Bank, Washington, DC.

 35. Buys, Piet, Uwe Deichmann, Craig Meisner, Thao Ton-That, and David Wheeler. 2007. "Country Stakes in Climate Change Negotiations: Two Dimensions of Vulnerability." Policy Research Working Paper 4300, World Bank, Washington, DC.

 36. Deininger, Klaus, Songqing Jin, and Hari K. Nagarajan. 2007. "Efficiency and Equity Impacts of Rural Land Rental Restrictions: Evidence from India." Policy Research Working Paper 4324, World Bank, Washington, DC.

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