Chapter 3 Public finance aspects of transport charging and investments

In this chapter we address three aspects of the pricing and financing of transport infrastructure. First, we analyse the optimal pricing and investment of transport infrastructure. We take a normative approach and propose cost benefit rules to assess investments together with the way they are funded. Second, we survey the specific problems that arise when local governments have responsibility for transport infrastructure and pricing: tax exporting, spillovers, etc. Third, we take a political economy stance and look at issues like lobbying, earmarking and bureaucratic influences.