Affordability and Subsidies in Public Urban Transport : What Do We Mean, What Can Be Done?
Subsidy policies on public urban transport have been adopted ubiquitously. In both developed and developing countries, subsidies are implemented to make transport more affordable. Despite their widespread implementation, there are virtually no quan...
| Main Authors: | , , , |
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| Format: | Policy Research Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2012
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2007/12/8879859/affordability-subsidies-public-urban-transport-mean-can-done http://hdl.handle.net/10986/7562 |
| Summary: | Subsidy policies on public urban
transport have been adopted ubiquitously. In both developed
and developing countries, subsidies are implemented to make
transport more affordable. Despite their widespread
implementation, there are virtually no quantitative
assessments of their distributional incidence, making it
impossible to determine if these instruments are pro-poor.
This paper reviews the arguments used to justify subsidy
policies in public urban transport. Using different tools to
quantitatively evaluate the incidence and distributive
impacts of subsidy policy options, the paper analyzes the
findings of a series of research papers that study urban
public transport subsidy policies in developed and
developing countries. The available evidence indicates that
current public urban transport subsidy policies do not make
the poorest better off. Supply-side subsidies are, for the
most part, neutral or regressive; while demand-side
subsidies perform better-although many of them do not
improve income distribution. Considering that the policy
objective is to improve the welfare of the poorest, it is
imperative to move away from supply-side subsidies towards
demand-side subsidies and to integrate transport social
concerns into wider poverty alleviation efforts, which
include the possibility of channeling subsidies through
monetary transfer systems or through other transfer
instruments (food subsidies, health services and education
for the poor). The general conclusion of the paper is that
more effort should be devoted to improve the targeting
properties of public urban transport subsidies using
means-testing procedures to ensure a more pro-poor incidence
of subsidies. |
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