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Research Highlights 2008: Sustainable Rural and Urban Development

Themes  |  Highlights  |  Team  |  Notes  |  Current Research Program  |  2008 Publications

Research Highlights 2008 for main highlights larger for team highlights pages

 Full Report

Research on rural and urban development, infrastructure, and the environment covers many aspects of and interactions within the rural-urban space. 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. With climate change becoming a focus of international policy debates, the research program on this topic has 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.  Results from this research program have been center stage in the 2009 World Development Report entitled "Reshaping Economic Geography."


Uncertain gains from formalizing land rights in Africa

Many African countries have recently adopted innovative land laws to increase tenure security and investment as well as transferability and productivity. Although land tenure formalization is widely promoted as a low-cost way to boost agricultural investment and productivity and to stimulate land markets, no real consensus has emerged on the relevance of such policies in Africa, where pre-conditions for success are often less favorable. 

New research analyzes a large sample of plots located in an important and relatively commercialized rice-growing area of Madagascar, which, historically, has had a high concentration of titled land. To minimize the influence of confounding factors, titled plots are compared to untitled plots cultivated by the same household. Titled rice plots are no better maintained than untitled ones, but titled plots are modestly more productive and valuable.

The results are consistent with evidence showing that customary arrangements already provide substantial land tenure security in rural Madagascar. An upper bound estimate of the value of a title, or its equivalent, is about 60 USD per hectare. This benefit is less than the per-parcel cost of some proposed land registration programs in Madagascar.1

A second study considers the case of Ethiopia, where over a 3-year period certificates to more than 20 million rural plots have been distributed. The research finds that securing land rights on a large scale and at low cost (about one-tenth of the most cost-effective programs elsewhere) is possible and can yield significant benefits.

In particular: (1) democratic control of the certification process was highly effective in preventing abuse by the powerful and helping to resolve disputes; (2) certification significantly increased tree planting and soil conservation investments; (3) even poor beneficiaries are willing to pay for updating of certificates, making maintenance of an appropriately designed registry system on a cost recovery basis feasible; and (4) more than 80 percent of beneficiary households perceive certificates to have increased women’s empowerment (by allowing them to defend land rights in cases of inheritance or divorce), transfer of land through rental markets, and governance (making uncompensated expropriation less likely).2

Benefits from improved connectivity via better road infrastructure
New research for Bangladesh documents the importance of linkages between the farm and urban areas for rural non-farm employment. Econometric results indicate that high return wage work and self-employment in non-farm activities cluster around major urban centers.

Spatial isolation discourages high return wage work and self-employment, and these effects are magnified in locations with higher agricultural potential. The study underscores the need for improved connectivity of regions with higher agricultural potential to urban centers for non-farm development in Bangladesh.3

The gains from improved connectivity are also apparent at the cross-country level. New research attempts to estimate how much trade expansion will occur as a result of upgrading and maintaining the trunk road network connecting 83 of the largest cities and capitals in Sub-Saharan Africa. Intra-African trade alone is expected to increase from 10 to about 30 billion USD per year, with additional benefits accruing from greater domestic trade, increased access to global markets, and considerable employment effects.

Program cost estimates based on Bank project experience would amount to about 20 billion USD for initial upgrading and 1 billion USD for annual maintenance over a 15-year investment cycle. These results indicate that payoffs from coordinated regional infrastructure investments in Africa could be large.4

A detailed study of Nepal investigates the relationship between isolation and subjective welfare. This is achieved by examining how distance to markets and proximity to large urban centers are associated with responses to questions about income and consumption adequacy. Results show that isolation is associated with a significant reduction in subjective assessments of income and consumption adequacy, even after controlling for consumption expenditures and other factors. The reduction in subjective welfare associated with isolation is much larger for households that are already relatively close to markets.

These findings suggest that welfare assessments based on monetary income and consumption may seriously underestimate the subjective welfare cost of isolation, and hence will tend to bias downward the assessment of benefits to isolation-reducing investments such as roads and communication infrastructure.5

Diverse impacts of climate change in Africa

Before policymakers can respond appropriately to climate change, they need to be able to reliably gauge the varying impacts of a warming planet in various locations. New research has quantified for the first time how climate change might affect net farm revenue from both crops and livestock across 16 agro-ecological zones in Africa.

Farmers will be able to tolerate—or perhaps even take advantage of—mild or moderate climate change through various adaptation measures, including switching among crops and livestock species, or between crops and livestock. Under certain climatic conditions, livestock species may provide more flexibility to some farmers and could help offset losses in crop income. However, the study—based on a survey of 9000 farmers in 11 African countries—shows that future farm incomes in Africa are very climate sensitive, and will be severely threatened in the event of extreme climate change scenarios.6

Acting Research Manager: Peter Lanjouw (November 2008 onward)
Research Manager: Gershon Feder (until October 31, 2008)
Ariel Dinar
Brian Blankespoor
Craig Meisner
Daniel Ayalew Ali
Donald Larson
Forhad Shilpi
Ghazala Mansuri
Govinda Timilsina
Hanan Jacoby
Hua Wang
Ioannis Kessides
Klaus Deininger
Maureen Cropper
Monica Das Gupta
Shahidur Khandker
Siobhan Murray
Stefan Kohler
Susmita Dasgupta
Timothy Thomas
Uwe Deichmann
Yanyan Liu


1. Jacoby, Hanan G., and Bart Minten. 2007. “Is Land Titling in Sub-Saharan Africa Cost-Effective? Evidence from Madagascar.” World Bank Economic Review 21(3):461-85.

2. Deininger, Klaus, Daniel Ayalew Ali, Stein Holden, and Jaap Zevenbergen. Forthcoming. “Rural Land Certification in Ethiopia: Process, Initial Impact, and Implications for the Other African Countries.” World Development.

3.  Deichmann, Uwe, Forhad Shilpi, and Renos Vakis. 2008. "Spatial Specialization and Farm-nonfarm Linkages." Policy Research Working Paper Series 4611, World Bank, Washington, DC.

4. Buys, Piet, Uwe Deichmann, and David Wheeler. “Road Network Upgrading and Overland Trade Expansion in Sub-Saharan Africa.” Under review in the Journal of African Economies. ( Web Brief | Based on World Bank Policy Research Working Paper 4097)

5. Fafchamps, Marcel, and Forhad Shilpi. 2008. "Isolation and Subjective Welfare: Evidence from South Asia." Policy Research Working Paper Series 4535, World Bank, Washington, DC.

6.  Seo, Noggol, Robert Mendelsohn, Pradeep Kurukulasuriya, Ariel Dinar, and Rashid Hassan, Rashid. 2008. “ Differential Adaptation Strategies to Climate Change in African Cropland by Agro-Ecological Zones.” Policy Research Working Paper 4600, World Bank, Washington, DC.

Last updated: 2009-03-20

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