The evaluation of the Transport Project and Farm to Market Roads Activity aimed to answer whether or not improved conditions throughout the road network:
• Lowered transport costs and travel time for businesses, including farm households;
• Provided better access to a wider range of job opportunities for individuals (labor market effects);
• Lowered the price of consumables and inputs by increasing competition and reducing barriers to entry posed by poor transport infrastructure; and
• Improved access to health establishments and schools
The overall expected result of these changes was an increase in overall incomes and employment at the household level. To comprehensively evaluate the impact of the MCA Honduras Transportation project, the Independent Evaluator used two methods: (i) a model-based approach, in which the treatment effect is represented by change in travel time, and the program impact is represented as a function of change in travel time. The model relies heavily on Geographic Information Systems (GIS) data for several purposes, including the estimation of changes in travel time; and (ii) HDM-IV analysis.
Units of Analysis
Kind of Data
Household survey; Origin and Destination survey; Traffic Volume; Traffic Speed
The MCC compact with Honduras was a five-year investment (2005-2010) of originally $215 million in two projects: (i) the Rural Development Project and (ii) Transport Project. The Rural Development Project included four major activities, including the Farm to Markets Roads Activity. The Transport Project included three major activities, including the Highway CA-5 construction, Secondary Roads construction and rehabilitation, and a Weight Control System. The Farm to Market Roads Activity investments are equivalent to 30% of the Rural Development Project and the Farm to Market Roads and Transport Project investments are 67% of the total Compact investment. The $138.1 million allocated to Farm to Market Roads and the Transport Project is the subject of both the impact evaluation and HDM-IV analysis presented here.
In 2005, Honduras became the second country to sign a compact with MCC. Low agricultural productivity and high transportation costs were identified as key constraints to economic growth, limiting Honduras’ ability to take advantage of its strategic location. The compact was designed to help small-scale farmers become small-scale entrepreneurs through training to improve their productivity, access to new markets, and access to credit. It was also expected to reduce transportation costs through improvements in road networks to enhance market access and foster greater market integration. The Transport Project and Farm to Market Roads Activity were designed to reduce transportation costs between targeted production centers and national, regional and global markets. The initial scope called for rehabilitating two major sections of Highway CA-5, upgrading and paving at least 70 km of secondary roads, and developing a vehicle weight control system. Under the Rural Development Project, MCA-Honduras sought to upgrade and pave 600 km of rural roads (farm-to-market roads). Due to increases in costs and a partial re-scoping of the road rehabilitation component of the project, only 65 km of secondary roads and 495 km of rural roads were ultimately upgraded, and the vehicle weight control system was removed from the investments.
As described in the Compact, the principal expected beneficiaries of the Transportation Project were (i) users of the improved roads by decreasing transportation costs to markets and social service delivery points (e.g., hospitals, schools), and (ii) employees and owners of urban and rural businesses that rely on the Honduran road network. The Transportation Project also promised to have a significant economic impact in the greater Central American region since it constitutes a key component of the Atlantic Corridor.