The basic service quality level of transport infrastructure in peripheral areas
The provision of transport infrastructure outside the most populated regions in Finland has been under budgetary pressure for more than decade. Furthermore, many of these less populated areas suffer a decline of the population, which adds to the stress on these regional economies. The prolonged reduction in maintenance also starts to show on the local roads and secondary railroad connections, which in turn may necessitate the reduction of speed or axle load limits. Last year the Ministry of Transport and Communication commissioned a study on the issue in which the various constituent elements for specifying an infrastructure (minimum) service level were discussed. In addition the study indicated the problems and trade-offs of bringing these elements together in a compound evaluation of a (minimum) service level. The constituent elements are very diverse, comprising technical and regulatory aspects of road and rail transport, social aspects such as entitled and aspired range of action, and economic aspects such accessability of product and labour markets. The article summarises the discussion on these elements. In addition it illustrates to what extent compensatory effects have occurred as regards housing and transport when comparing households in the countryside with urban households. There are cost differences which are in accordance with the theory, but the income gap seems to be decisive. The illustration is based on micro-data from the years 1985-1998. The article concludes with pointing at the character of decision making, and the desirable integration of regional public investment portfolios from various policy areas.
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- Masahisa Fujita & Paul Krugman & Anthony J. Venables, 2001. "The Spatial Economy: Cities, Regions, and International Trade," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262561476, June.
- Forslund, Ulla M & Johansson, Borje, 1995. "Assessing Road Investments: Accessibility Changes, Cost Benefit and Production Effects," The Annals of Regional Science, Springer, vol. 29(2), pages 155-74, May.
- Risto Sullström & Adriaan Perrels, 2004. "Finnish Household Consumption in Monetary and Physical Terms - Trends and Clarifications," Discussion Papers 351, Government Institute for Economic Research Finland (VATT).
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