Road pricing

Summary Among the main problems in the public sector of the economy are those of road congestion on the one hand and under-utilisation of roads on the other. Partly this is a consequence of inefficient price policies for the use of roads. But road pricing involves many technical and distributional problems. A preliminary survey of the effects suggests that quite simple road pricing systems, such as a differentiated urban rural license fee, may be a most efficient way of introducing road pricing. Tolls on critical access points may be another efficient way of introducing congestion charges. At the same time it is important to attempt to reduce charges on uncongested roads, and this is especially necessary for developing countries. A preliminary survey of the effects of such a rearrangement of road taxation suggest that there would be no marked redistributional effects. But much more work is required on this aspect of road pricing. Adviser on Research, Graduate Centre for Management Studies. This paper was written in 1967 during a period as Visiting Professor at M.I.T., with some special reference to conditions in the United States.