Political economy of transport pricing and investment.

Most of the recent transport economics research has been dealing with normative issues (see, among many others, Small and Verhoef (handbook urban economics forthcoming), Arnott, Rave and Schöb (IFOmonograph,2005), De Borger and Proost EE book (2001)). The central question in this literature was: what are the most efficient pricing and investment policies taking into account different market imperfections? These imperfections are not only situated in the transport sector (e.g., the absence of time-differentiated pricing, the case where not all alternatives can be priced correctly, imperfect competition for some transport modes) but also in the rest of the economy (distortive labour taxes, imperfect redistribution instruments, etc.). This normative research has shown that new forms of pricing (road pricing) may generate important efficiency gains if the revenues of these new pricing instruments are used efficiently. In practice, however, one observes rather inefficient pricing and investment policies in many countries. Moreover, new forms of pricing (road pricing, cordon tolls, kilometer charges, ect.) that may clearly be beneficial for society face serious opposition and are only very slowly implemented.In this proposal, we take a positive approach to transport policy, extensively building upon political economy models. The main research question is how we can explain current transport pricing and investment policies that countries and federations implement. This is an area that received relatively little attention. The research question opens a wide field.. We therefore suggest concentrating the attention on a few specific topics in order to progressively build and test theories for their practical relevance.

Keywords:INVESTMENTS, PRICE SETTING

Disciplines:Applied economics, Economic development, innovation, technological change and growth, Economic history, Macroeconomics and monetary economics, Microeconomics, Tourism

Project type:Collaboration project