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Transport policy competition between governments: A selective survey of the literature

  • DE BORGER, Bruno
  • PROOST, Stef

In this paper, we provide a selective survey of the recent literature that deals with transport policy competition between governments. The paper shows the potential relevance of strategic behaviour by governments in deciding on prices (taxes, tolls) and investment in infrastructure capacity. The severity and the welfare effects of tax exporting behaviour and of horizontal tax and expenditure competition strongly depend on whether the transport links controlled by the different governments are strategic complements or substitutes. The scarce transport economics literature on vertical competition between hierarchical governments has so far mainly focused on the question which government level should be responsible for providing and financing local infrastructure. The survey identifies a number of gaps in the literature that may be useful avenues for further research. These include more detailed analysis of the implications of vertical tax and expenditure competition between hierarchical government levels, a political economy approach to problems of transport decision-making with multiple government levels and, most importantly, more empirical analysis to document the relevance of the theoretical literature.

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Paper provided by University of Antwerp, Faculty of Applied Economics in its series Working Papers with number 2012014.

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Length: 46 pages
Date of creation: Jul 2012
Date of revision:
Handle: RePEc:ant:wpaper:2012014
Contact details of provider: Postal: Prinsstraat 13, B-2000 Antwerpen
Web page: https://www.uantwerp.be/en/faculties/applied-economic-sciences/

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