1887

OECD Economics Department Working Papers

Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.

The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.

English, French

The Land Transport Sector

Policy and Performance

This paper provides a broad overview of policy goals and instruments and commonly used performance and policy indicators related to land transport. Two policy aspects, infrastructure investment and externalities, are explored in more depth. A review of planning and decision making in individual countries reveal significant variations between countries as regards how cost-benefit analysis affect decision making about infrastructure investment. There is scope for improvements in the use of cost-benefit analysis. Estimates of external costs for fifteen European Union countries are provided, together with estimates on the extent of pricing to internalise external costs. Fuel taxes amounted to around 2% of GDP in 2000, roughly corresponding to estimated external costs related to environmental and health effects. There is a potential to reduce congestion by introducing congestion charges. This can be done in a revenue-neutral manner by transforming existing vehicle taxes and road tolls.

English

Keywords: Transport policy and performance, pricing of externalities, cost-benefit analysis, infrastructure investment
JEL: R42: Urban, Rural, Regional, Real Estate, and Transportation Economics / Transportation Economics / Transportation Economics: Government and Private Investment Analysis; Road Maintenance, Transportation Planning; H43: Public Economics / Publicly Provided Goods / Project Evaluation; Social Discount Rate; R48: Urban, Rural, Regional, Real Estate, and Transportation Economics / Transportation Economics / Transportation Economics: Government Pricing and Policy; Q51: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Environmental Economics / Valuation of Environmental Effects
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