Abstract

This paper investigated transport infrastructure as an element in poverty reduction at the macro economic level for the case of Mauritius. An aggregate poverty function, extended for the sake of the study with transport capital of the country for the period 1960-2005 has been employed in a Vector Autoregressive framework to account for dynamism and endogeneity. Results from the analysis show that transport capital have been a sizeable element in reducing poverty in the country with a reported coefficient of -0.14. Such is also the case for non-transport capital, although to a lower extent. Poverty is also found to be essentially a dynamic phenomenon and constitutes a vicious cycle. Indirect effects of transport capital are also confirmed as such type of capital is observed to have positive effects on output, employment, human capital and negative effect on inequality, all of which in turn reduce poverty level.