Impact of infrastructure investment on poverty in Latin America in 1996-2016

Abstract

Poverty and extreme poverty affect millions of people in Latin America, and this problem is mainly due to the lack of income that reduces the ability of individuals to meet their minimum needs. Thus, with a view to reducing poverty rates in the world, the United Nations Organization proposes, among its Sustainable Development Goals, increased investment in public infrastructure. Therefore, this paper presents the impact of economic and social infrastructure on poverty and extreme poverty in Latin America. To this end, two models were estimated, one for poverty and one for extreme poverty, using the correlational method through linear regression for fixed effects panel data from 15 countries during the period 1996-2016. The results indicate that infrastructure investment has a reverse effect on extreme poverty and poverty in the region. Thus, water infrastructure had the greatest reducing effect on extreme poverty. Based on the foregoing, it is intended to provide a clearer understanding of the relationship between investment in public infrastructure and poverty in Latin America in order to support the creation of investment policies aimed at that sector. It is also important that governments improve the management of public investment and reduce gaps in Latin America’s economic and social infrastructure

Keywords

• latin america
• infrastructure
• poverty