Rural Road Development and Ethnic Inequality in Vietnam

Scott R. Sanders, Brigham Young University
Brian C. Thiede, Cornell University

Existing literature on rural roads and economic development has emphasized that improved transportation costs and market prices improve household welfare. However, this body of work does not address the distributional effects of rural road development. Our research addresses this gap by examining how the changing spatial relationships associated with rural road development affect overall and inter-ethnic inequality within Vietnamese communes. Given its stark ethnic inequalities and a recent ‘big push’ in transportation infrastructure development, Vietnam is an ideal case to examine the effect of road developing on inequality. Using the Vietnamese Household Living Standards Surveys between 2002 and 2008, we use a propensity score approach to assess the effect of improved infrastructure on (a) between-household inequality within communes and (b) inequality between ethnic minority and majority households within communes. Results suggest that road development reduces overall inequality but has trivial effects on inter-ethnic inequality.