ROAD INVESTMENT AND PRICING IN DEVELOPING COUNTRIES
| Published date | 01 August 1977 |
| DOI | http://doi.org/10.1111/j.1468-0084.1977.mp39003003.x |
| Date | 01 August 1977 |
ROAD INVESTMENT AND PRICING IN DEVELOPING
COUNTR TES
By S. THOMAS
The reappraisal of aid and development policies, carried out by the British
Government during 1975, was stimulated by the realization that not only have
some countries lagged behind in the general rate of development but also 'the
poorest groups within most developing countries have benefited very little, if at all,
from any improvement'.' Consequently a change in the direction of policy was
articulated with aid to be concentrated, in future, upon the poorest countries and
the poorest groups.
In most developing countries a significant proportion of available public invest-
ment has been allocated to transport, and current development plans suggest that
this will continue.2 Resources have been used primarily to improve rather than
extend the existing transport network and the expenditure has been justified by
cost savings to existing traffic. This paper attempts to reassess the desirability of
major road investment in the light of the new distributional priorities and to ex-
plore whether the subsequent implications could be modified by a policy of road
pricing. The conventional argument against pricing uncongested roads is shown
to be inapplicable once distribution becomes an important objective and it is
suggested that main road investment may only be justifiable if accompanied by road
pricing.
THE POTENTIAL DESIRABILITY OF MAJOR ROAD INVESTMENT
Road appraisals in developing countries are normally conducted within a
partial equilibrium framework. The approach estimates road user savings and
then assumes that these approximately measure the overall benefit to the economy.3
Benefits accruing to induced traffic are, however, sometimes measured in terms of
the net value of induced production. While the methodology is similar to that
'Ministry of Overseas Development, The Changing Emphasis in British Aid Policies: More
Help for the Poorest. CMND 6270 London, HMSO, 1975, p. 1.
2 Transport Investment as a % of total planned public sector investment.
' For discussions of transport appraisal methodology in Developing Countries see:
Heggie, I. G., Teansport Engineering Economics. London, McGraw Hill, 1972, Odier, L.,
The Economic Benefits of Road Construction and Improvement Paris, Bureau Central D'Etudes
Pour Les Equipments D'Outre-Mer, 1962., Van der Tak, H. G. and Ray, A., The Economic
Benefits of Road Transport Projects. Washington, IBRD, 1971.
Coun try Plan % Transport Country Pian % Transport
Mauritius 1971-5 27.5 Malawi 1971-80 34.8
Uganda 1971-5 28.2 Senegal 1973-7 17.5
Tanzania 1969-74 28.9 Sierre Leone 1973-8 21.3
Kenya 1974-8 40.6 Nigeria 1975-80 27.5
Sudan 1970-5 14.8 Philippines 1971-4 57.5
Botswana 1973-8 26.2 Thailand 1972-6 19.5
Zambia 1972-6 29.7 Malaysia 1971-5 18.4
Swaziland 1973-7 17.0 India 1974-8 19.2
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