IDEAS home Printed from
   My bibliography  Save this article

A comparison of innovative financing and general fiscal investment strategies for second-class highways: Perspectives for building a sustainable financing strategy


  • Sun, Zhentian
  • Li, Xuhong
  • Xie, Yuanchang


A long-term sustainable financing strategy is critical for highway development and maintenance; however, the effects of two major financing strategies—general fiscal investment, strategy (GFIS) and innovative financing strategy (IFS)—are still unclear to transportation decision, and policymakers. Based on the current financing practices for the second-class highways in China, (equivalent to U.S. or state highways in the United States connecting major cities in a state), this paper developed an integrated method to assess the long-term sustainability of IFS and GFIS in terms of the following widely accepted criteria: adequacy, stability, efficiency, equity, ease of implementation, and political acceptability. These criteria were further classified into quantifiable efficiency criteria (QEC) and non-quantifiable social-institutional criteria (NQSIC) categories. In this research, time-series analysis and telephone-interview methods were used for accessing QEC and NQSIC, respectively. It was found that the IFS in general has more advantage in providing sufficient, stable, and effective funds than the GFIS, and it is considered more favorable and acceptable than GFIS by both provincial and local governments. The results of this research can help decision makers at various levels in China to develop sustainable and effective funding strategies for the second-class highways. In addition, this study provides an international perspective for solving the second-class-highway financing issues and is a useful reference to researchers and policymakers in other countries.

Suggested Citation

  • Sun, Zhentian & Li, Xuhong & Xie, Yuanchang, 2014. "A comparison of innovative financing and general fiscal investment strategies for second-class highways: Perspectives for building a sustainable financing strategy," Transport Policy, Elsevier, vol. 35(C), pages 193-201.
  • Handle: RePEc:eee:trapol:v:35:y:2014:i:c:p:193-201
    DOI: 10.1016/j.tranpol.2014.05.022

    Download full text from publisher

    File URL:
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    1. Starr McMullen, B. & Zhang, Lei & Nakahara, Kyle, 2010. "Distributional impacts of changing from a gasoline tax to a vehicle-mile tax for light vehicles: A case study of Oregon," Transport Policy, Elsevier, vol. 17(6), pages 359-366, November.
    2. Peter R. Winters, 1960. "Forecasting Sales by Exponentially Weighted Moving Averages," Management Science, INFORMS, vol. 6(3), pages 324-342, April.
    3. Hayashi, Yoshitsugu & Yang, Zhongzhen & Osman, Omar, 1998. "The effects of economic restructuring on China's system for financing transport infrastructure," Transportation Research Part A: Policy and Practice, Elsevier, vol. 32(3), pages 183-195, April.
    4. Gwilliam, Ken & Shalizi, Zmarak, 1999. "Road Funds, User Charges and Taxes," World Bank Research Observer, World Bank Group, vol. 14(2), pages 159-185, August.
    5. Sun, Zhentian & Li, Xuhong & Qiao, Wenxin & Haghani, Ali, 2013. "Entropy-based performance evaluation on institutional structures of trunk highway management—Case study in China," Transport Policy, Elsevier, vol. 27(C), pages 85-91.
    6. Nigel A Chalk & Richard Hemming, 2000. "Assessing Fiscal Sustainability in Theory and Practice," IMF Working Papers 00/81, International Monetary Fund.
    7. Hyndman, Rob J. & Koehler, Anne B. & Snyder, Ralph D. & Grose, Simone, 2002. "A state space framework for automatic forecasting using exponential smoothing methods," International Journal of Forecasting, Elsevier, vol. 18(3), pages 439-454.
    8. Taylor, James W., 2003. "Exponential smoothing with a damped multiplicative trend," International Journal of Forecasting, Elsevier, vol. 19(4), pages 715-725.
    9. repec:eee:jotrge:v:18:y:2010:i:2:p:301-313 is not listed on IDEAS
    10. António Afonso, 2005. "Fiscal Sustainability: The Unpleasant European Case," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 61(1), pages 1-19, March.
    11. Wilcox, David W, 1989. "The Sustainability of Government Deficits: Implications of the Present-Value Borrowing Constraint," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 21(3), pages 291-306, August.
    12. Wachs, Martin, 2003. "A Dozen Reasons for Raising Gasoline Taxes," Institute of Transportation Studies, Research Reports, Working Papers, Proceedings qt2000f8t0, Institute of Transportation Studies, UC Berkeley.
    13. Sebastian Edwards, 2003. "Debt relief and fiscal sustainability," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 139(1), pages 38-65, March.
    14. Feng Xie & David Levinson, 2009. "Modeling the Growth of Transportation Networks: A Comprehensive Review," Networks and Spatial Economics, Springer, vol. 9(3), pages 291-307, September.
    15. García Márquez, Fausto Pedro & Lewis, Richard W. & Tobias, Andrew M. & Roberts, Clive, 2008. "Life cycle costs for railway condition monitoring," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 44(6), pages 1175-1187, November.
    16. Christopher Kennedy & Eric Miller & Amer Shalaby & Heather Maclean & Jesse Coleman, 2005. "The Four Pillars of Sustainable Urban Transportation," Transport Reviews, Taylor & Francis Journals, vol. 25(4), pages 393-414, March.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. repec:gam:jsusta:v:10:y:2018:i:11:p:4256-:d:183576 is not listed on IDEAS
    2. Yang, Di & Kastrouni, Eirini & Zhang, Lei, 2016. "Equitable and progressive distance-based user charges design and evaluation of income-based mileage fees in Maryland," Transport Policy, Elsevier, vol. 47(C), pages 169-177.


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:trapol:v:35:y:2014:i:c:p:193-201. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.