Paved to Nowhere: Dubious Payoffs of Rural Road Expansion in Nepal’s Rugged Terrain

We reexamine whether the economic benefits commonly attributed to rural road expansion hold in Nepal’s transforming economy and investigate an important environmental externality. Across a broad set of plot- and household-level outcomes, we find little systematic evidence that better road access enhances economic outcomes. These null results persist across alternative specifications and geographical subsamples. In contrast, ward-level estimates reveal that the expansion of earthen (motorable) roads between 2016 and 2018 is associated with a significant increase in landslide-affected areas, whereas blacktop roads exhibit no detectable effect. The combination of muted economic impacts and heightened environmental risk—set against a backdrop of rapid out-migration and declining agricultural engagement—suggests that recent patterns of rural road proliferation in Nepal’s Hill region may yield low or even negative net returns. The findings underscore the importance of context-specific infrastructure planning that accounts for demographic change, market conditions, and topographic fragility.

Publication Details

Journal
Asian Development Review
Published
2026-03-24
DOI
https://doi.org/10.1142/s0116110526400019
Primary Topic
Fiscal Policy and Economic Growth
Type
article
Field-Weighted Citation Impact
0.00
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article

Paved to Nowhere: Dubious Payoffs of Rural Road Expansion in Nepal’s Rugged Terrain

Asian Development Review
Fiscal Policy and Economic Growth
article

Paved to Nowhere: Dubious Payoffs of Rural Road Expansion in Nepal’s Rugged Terrain

article en

Abstract

We reexamine whether the economic benefits commonly attributed to rural road expansion hold in Nepal’s transforming economy and investigate an important environmental externality. Across a broad set of plot- and household-level outcomes, we find little systematic evidence that better road access enhances economic outcomes. These null results persist across alternative specifications and geographical subsamples. In contrast, ward-level estimates reveal that the expansion of earthen (motorable) roads between 2016 and 2018 is associated with a significant increase in landslide-affected areas, whereas blacktop roads exhibit no detectable effect. The combination of muted economic impacts and heightened environmental risk—set against a backdrop of rapid out-migration and declining agricultural engagement—suggests that recent patterns of rural road proliferation in Nepal’s Hill region may yield low or even negative net returns. The findings underscore the importance of context-specific infrastructure planning that accounts for demographic change, market conditions, and topographic fragility.

Asian Development Review
Openalex Percentile: Top 15%
Fiscal Policy and Economic Growth
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Paved to Nowhere: Dubious Payoffs of Rural Road Expansion in Nepal’s Rugged Terrain · Asian Development Review (2026) | TGRS Research Map | TGRS