Impact of transport infrastructure on poverty, income inequality, and unemployment in developing countries: An assessment of sustainable development goals

The 2030 Agenda for Sustainable Development Goals prioritizes the elimination of poverty, reduction of income inequality, and achievement of full and productive employment for all. However, inadequate transport infrastructure remains a key barrier to these goals, as it hampers the movement of goods and people between urban and rural areas, limiting access to economic and employment opportunities. This study examines the potential of transport infrastructure in alleviating poverty, reducing income disparities, and curbing unemployment in a panel of 49 developing countries from 2000 to 2023. Using a two-stage Instrumental Variable Generalized Method of Moments approach, our findings reveals that road and rail infrastructure significantly contribute to poverty alleviation in developing countries, while air freight is associated with higher poverty levels. Regarding income inequality, improvements in road, rail, and port connectivity are associated to reduced inequality, while port traffic and air freight appear to have no significant effect. All types of transport infrastructure are effective in reducing unemployment. Our results emphasize the role of economic growth, trade openness, and domestic investment in promoting inclusive growth through inequality and poverty reduction. In contrast, human capital reduces poverty and unemployment but worsens inequality. Regional analysis revealed that the results varies across regions, including Sub-Saharan Africa, Middle East & North Africa, East Asia and the Pacific, South Asia, and Latin America-Caribbean countries. These findings are robust to an alternative econometric technique. These insights offer some important policy implications for developing countries aiming to achieve SDGs 1, 8, and 10 in alignment with the Millennium Development Goals. Therefore, reinforcing transport infrastructure emerges as a key strategy to promote spectacular inclusive growth across diverse regional contexts.