Impacts of Government Infrastructural Investments on Poverty and Income Distribution in Rural Areas of Iran

Infrastructure plays an important role in the process of economic development. Access to such infrastructures as safe piped drinking water, educational and health services, electrification and efficient transport system enhance human welfare. The main objective of this study is to determine the contribution of the main types of infrastructure investments to reduction of poverty and more balanced income distribution in Iran. For this purpose, poverty line and head count ratio index were calculated over 1982-2002 using data collected from various Iranian organizations and statistical centers. Impacts of various types of infrastructural development on agricultural production, poverty and inequality were investigated through parametric method and econometric analysis. Computed poverty and income distribution indices imply that rural poverty has decreased over the study period,while inequality has been increased in the rural areas. The estimated parameters of the income distribution model indicate that investment on health, electrification and irrigation network establishments has improved rural income distribution in rural areas , while the extension of rural roads and educational centers has been accompanied by worsened inequality in these areas