PERU SECTOR: RURAL ROADS IMPACT EVALUATION OF THE PERU SUBNATIONAL TRANSPORT PROGRAM What is the impact of access to rural roads on the opportunities and welfare of the remote rural poor? Peru Subnational Transport Program FOCUS: Component 1 of the Program: rural road rehabilitation and improvement toward social inclusion and improved logistics. PROJECT STATUS: Under implementation. IMPLEMENTING AGENCY: Provias Descentralizado, Ministry of Transport and Telecommunications of Peru. LENGTH: Traders traveling on rural roads in Peru 2,200 kilometers of rural roads across Peru in approximately 139 road Context segments. In the past decade, Peru has displayed strong economic perform- ROAD SELECTION: ance, but disparities across the country remain high, particularly Roads were selected based on between rural and urban areas. In 2015, while the poverty rate was their ranking in a prioritization index only 14.5% in urban areas, it stood at 45.2% in rural areas. of a list of roads selected by the community, which identified those While rural poverty in Peru has multiple roots, one of them can be having the potential to bring the traced to poor connectivity to markets, social services, and income- highest impact on social inclusion generating opportunities; inadequate transport services in the impact and logistics development. more remote regions; and logistics bottlenecks in the hinterland. Road network constraints in both coverage and quality are TREATMENT: considered one of the main reasons for unequal development of Most road rehabilitation will consist the country’s different departments. To address these constraints, of low-cost structural improvements, the Peru Subnational Transport Program (PATS) was approved in such as providing gravel roads as an 2015 by the World Bank. improvement over dirt paths. The project aims to provide sustainable access to roads to the consumption, asset ownership, school attendance, and health rural population of Peru. The project has 3 objectives: (i) facilitate service utilization rates, among other variables. The evaluation sustainable road access of Peru’s rural populations to services, methodology involves an ex ante definition of the treatment (ii) reduce transport costs on rural roads linked to priority logistics and comparison groups and a quasi-experimental methodology corridors, and (iii) strengthen decentralized road management. to identify the impact of rural road rehabilitation, based on the It consists of a comprehensive countrywide transport program ranking of a prioritization index, considering all roads proposed involving road rehabilitation and improvement, maintenance for rehabilitation. The evaluation will consider as a control group activities, and institutional strengthening to support decentralized the rural roads with the highest priority scores among those that rural road management. The total project financial envelope were not selected. The evalaution also includes an experimental amounts to US$600 million, including a US$50 million loan from treatment arm for the local development window component, the World Bank and a US$50 million loan from IADB. in which the provinces that will receive this complementary intervention are selected at random. Impact Evaluation Research The impact evaluation seeks to determine the welfare outcomes of Policy Relevance the PATS. The evaluation is focused on three activities of the project: While the impact of rural roads projects has been extensively studied, (i) the rehabilitation and improvement of rural roads to enhance to date there are very few rigorous impact evaluations quantifying access to services and opportunities and to reduce logistics costs, the effectiveness of these investments and their distributional (ii) creating a local and logistics development window to enhance outcomes. This evaluation will make contributions to the existing logistics and productivity and spur economic activity alongside body of literature on the impacts of rural roads by adopting a rigorous improved roads, and (iii) building capacity of microenterprises to design, thus having a great potential to influence both local and perform routine maintenance on rural roads. international policy making in the sector in the future. The primary evaluation goal underpinning this research is to In addition, the evaluation will inform policy makers on the ways determine the extent to which a rural roads project can affect transport investments interact with complementary interventions, available income-generating opportunities and the welfare of such as the local development window and the capacity building the remote rural poor. Accordingly, the proposed study seeks to of microenterprises to conduct routine maintenance of rural roads. understand the impacts of the overall intervention through a set The gender aspect incorporated in the evaluation will provide of social and economic indicators such as household income and evidence on whether the interventions have differential impacts for men and women. As a final point, the Peruvian government is committed to poverty reduction and social equity. Accordingly, the evaluation will provide valuable advice to policy makers on how transport infrastructure and ancillary services can be tailored to the needs of the poorest and more vulnerable groups, and which complementary interventions can maximize the impact of rural roads projects. Joint implementation of this impact evaluation with the IADB and with client will also help foster country ownership. For more information email dimetransport@worldbank.org or Rural Road in the Lamas Province in Peru visit www.worldbank.org/en/research/dime/brief/transport The ieConnect for Impact program links project teams with researchers to develop rigorous and innovative impact evaluations that both substantially improve the evidence-base for policy making and induce global shifts in transport policy. The ieConnect program is a collaboration between the World Bank’s Development Impact Evaluation (DIME) group and the Transport Global Practice. This program is part of the Impact Evaluation to Development Impact (i2i) multi-donor trust fund and is funded with UK aid from the UK government and by the European Union.