The relationship between poverty incidence and road development is analyzed econometrically in this paper, in the context of rural Laos. Between 1997-1998 and 2002-2003, rural poverty incidence in Laos declined by 9.5% of the rural population. Approximately 13% of this decline can be attributed to improved road access. There is now a high return to providing dry weather access to the most isolated households of Laos, those with no road access at all. They constitute 31.6% of all rural households in Laos and are being left behind by the development of the market economy.