A political economy model of road pricing

Bruno De Borger and Stef Proost

Journal of Urban Economics, 2012, vol. 71, issue 1, 79-92

Abstract: In this paper, we use a simple majority voting model to study the introduction of urban congestion tolls. The model allows for different types of uncertainty and considers different uses of the toll revenues. The following results are obtained. First, we show that individual uncertainty with respect to modal substitution costs may imply that a majority votes against road pricing ex ante, although a majority would have been in favor after its introduction ex post. Moreover, if a majority is against road pricing ex ante, there will also be no majority for organizing an experiment that would take away the individual uncertainty. Second, political uncertainty with respect to the use of the revenues corroborates the finding that ex ante more voters will be against the introduction of tolls. Third, both types of uncertainty suggest that fewer voters are against road pricing when toll revenues are used to subsidize public transport than when they are redistributed to all voters. Importantly, the results of this paper are consistent with a number of recent empirical observations on efforts to introduce road pricing, including the systematic rejection of road pricing in referenda, the more favorable attitudes towards road pricing after than before its introduction, and tying the toll revenues to support public transport.

Keywords: Policy reform; Road pricing; Majority voting (search for similar items in EconPapers)
JEL-codes: D7 D72 H2 H23 R4 R48 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (63)

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Related works:
Working Paper: A political economy model of road pricing (2010)
Working Paper: A political economy model of road pricing (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:juecon:v:71:y:2012:i:1:p:79-92

DOI: 10.1016/j.jue.2011.08.002

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