How to decide on regional infrastructure to achieve intra-regional acceptability and inter-regional consensus?
Westin, J. × Franklin, J. Grahn-Voorneveldt, S. Proost, Stef #
Association, in cooperation with the Regional Science Program, University of Illinois at Urbana-Champaign
Papers in Regional Science vol:91 issue:3 pages:617-643
Many regions face through-traffic that causes local negative externalities. Regions might respond by imposing user charges or investing in bypass transport infrastructure. In this paper two levels of decision-making are studied: co-operation among regions and acceptability within regions. If left to a single region, it will overcharge for usage and under-invest in bypass capacity. Through interregional co-operation, an efficient outcome can be reached. Without compensation within each region, intraregional acceptability constraints protecting certain interest groups can lead to inefficient tolling. This can explain political preferences for tolling bypasses and not city centre roads.