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Public Investment and Poverty Reduction: Lessons from China and India

Sukhadeo Thorat and Shenggen Fan
Economic and Political Weekly
Vol. 42, No. 8 (Feb. 24 - Mar. 2, 2007), pp. 704-710
Stable URL: http://www.jstor.org/stable/4419287
Page Count: 7
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Public Investment and Poverty Reduction: Lessons from China and India
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Abstract

Growth in agricultural productivity, the rural non-farm sector and rural wages, which are the main sources of poverty reduction in both China and India, have been made possible by public investments in R&D, infrastructure (such as roads, power, irrigation, communication and education) and anti-poverty programmes. However, returns on these public investments, reckoned in terms of poverty reduction, vary drastically across different types of investment. The trade-off between agricultural growth and poverty reduction is generally small among different types of investments and between regions. Agricultural research, education, and infrastructure development have a significant growth impact as well as a large poverty reduction impact.

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