Spatial isolation is considered as one of the main determinants of poverty. Therefore, many transport investments are undertaken with a stated objective of poverty reduction. In our paper, we evaluate a Tanzanian program that rehabilitated 2500km of major roads between 2008 and 2013. We deal with endogenous placement issues with a household fixed-effect strategy combined with a propensity score matching. Contrary to most studies, we find damaging effects of the road on the rural population: the price of the main product (rice) decreases, they reduce rice production and reallocate labor away from farm but opportunities of o_-farm work are scarce. This results in depressed wages and households declare a lower satisfaction. This is consistent with a situation where rural households face an increased competition due to lower transportation costs.

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