Evaluating the Impact of Infrastructure Rehabilitation Projects on Household Welfare in Rural Georgia. Policy Research Working Paper.

Economic and political turmoil have led to a dramatic fall in living standards in the Republic of Georgia. Rural areas have been hit particularly hard, suffering from increasing marginalization; worsening access to roads, information, health care facilities and markets; and dilapidation of health and education establishments. In an effort to channel scarce public resources and international aid to their best uses, this paper evaluates the impact of various types of rural community infrastructure rehabilitation on household well-being, using household and community-level survey data. The sample included 144 school, road, and water rehabilitation projects carried out in 106 rural villages during 1998-2000. The empirical approach utilized the panel structure of the data to control for time-invariant unobservables at the community level by applying propensity-score-matched double difference comparison. Results indicate that improvements in school and road infrastructure produced significant welfare gains for the poor at the village and country levels. The impact of water rehabilitation projects was ambiguous. School rehabilitation projects produced the largest gains for the poor and positively affected attendance and enrollment rates. Methodologically, this analysis shows that ad hoc community surveys matched with ongoing nationally representative surveys can provide a feasible and low-cost impact evaluation tool. (Contains 40 references) (Author/SV)