Transport and Decentralisation

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Over the past decades, many OECD countries' transport sectors have become more decentralised.  This report examines whether the economic benefits and experiences of decentralisation have been positive.  It finds that the answers vary according to the mode of transport, the type of decentralisation, and transport users' representation in the process of decision-making.

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The political economy of transport decentralisation

European Conference of Ministers of Transport

Political economy tries to incorporate the incentives and constraints which are at play within a democracy in the analysis of governmental institutions. In the context of decentralisation versus centralisation the effect of interest groups, the scope and incentives for innovation and the career concerns of public officials can differ. The broader economic context and what type of policies have priority determine in theory whether the trade-off is in favour of the decentralised or centralised provision of transport. Empirical evidence for EU countries in 2000 suggests, however, that there is a higher level of traffic safety, measured by an indicator of traffic deaths, in countries with more decentralised provision of public goods. Increasing the degree of expenditure decentralisation by 0.10, which, for instance, is the difference in decentralisation between Italy (0.25) and Germany (0.35), is associated with a reduction by 2.2 traffic deaths per 100 000 inhabitants. The benefit of decentralisation is, however, contingent on the presence of strong institutions and low levels of corruption.

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