Infrastructure indicators for rural development: integrating local and international literature

This report draws on international and South African literature about the impact of infrastructure on development. Investments in infrastructure can serve as a powerful driver of structural change and development. The mechanisms through which such transformative restructuring occur vary, suggesting that infrastructure may exist but not necessarily yield meaningful outcomes for marginalised people. Conceptual studies distinguish between isolated and bundled infrastructure. When infrastructure is bundled, for example, the multiplier effects generated are massive. By combining road and energy infrastructure investments, higher returns in employment, greater agricultural productivity, income growth and educational attainment can be expected. These development outcomes are more significant when bundled infrastructure is delivered. Isolated infrastructure investments also generate positive outcomes but not at the magnitude of bundled infrastructure (multiplier effects are relative small). Moreover, there is a growing body of empirical literature from Global South countries that reinforce the developmental impact of both bundled and isolated infrastructure. Emerging patterns from the literature illustrate how reliable energy supply to underserviced areas can have a positive effect on non-farm economic activity and boost school attendance (especially for boys). When infrastructure is bundled, the effects are amplified. Reliable energy supply combined with quality rural roads and market access results in shorter travel times, diverse markets, reduced price volatility, enhanced food and nutrition security and improves household consumption levels. In some instances, the inclusion of rural roads and connecting them to urban centres may have the unintended consequence of facilitating out-migration of the youth.