Transport Financing and Regional Development

This chapter reviews different issues that arise when transport finance is considered from a regional perspective. It initially deals with infrastructure investment as a regional policy tool, discussing the factors that explain the differences in its effectiveness. Such factors depend on local and project characteristics. Then, the role that transport accessibility has in improving labour market outcomes is analysed. It is observed that although the impacts can be expected to be positive, this does not mean that any transport project may be justified on these grounds. Afterwards, issues related to pricing and taxation by governments that interact with each other are dealt with. Such interactions may result in fiscal or expenditure externalities, of either horizontal or vertical nature. Finally, the role that transport policies may have in alleviating poverty is reviewed summarising the characteristics of policies applied in different contexts.