THE IMPACT OF AGRICULTURAL EXTENSION AND ROADS ON POVERTY AND CONSUMPTION GROWTH IN FIFTEEN ETHIOPIAN VILLAGES

This article investigates whether public investments that led to improvements in road quality and in-creased access to agricultural extension services led to faster consumption growth and lower rates of poverty in rural Ethiopia. Estimating an Instrumental Variables model using Generalized Methods of Moments and controlling for household fixed effects, we find evidence of positive impacts with mean-ingful magnitudes. Receiving at least one extension visit reduces headcount poverty by 9.8 percentage points and increases consumption growth by 7.1 percentage points. Access to all-weather roads reduces poverty by 6.9 percentage points and increases consumption growth by 16.3 percentage points. These results are robust to changes in model specification and estimation methods. Key words: Ethiopia, extension, growth, poverty, roads. In many African countries, improving growth rates in agriculture is seen as critical for sus-tained poverty reduction. Such a view stems from the fact that, while Africa is urbanizing, the vast majority of people still live in rural ar-eas and derive livelihoods from agricultural ac