SUBTOPIC 5. PASSENGER TRANSPORT: INVESTMENT AND FINANCING DECISIONS IN URBAN TRANSPORT

Public transport subsidies have become a major political issue in most western industrial countries in recent years, largely because of the considerable outlay of public finance. Those favouring subsidy emphasize the necessity of public transport for the poor, the old and the transport deprived and the need to protect the urban environment from the unbridled use of the motor car. Opponents regard subsidy as a misdirection of scarce resources leading to operational inefficiency and a spiral of increasing costs and subsidies. Ther is some justification for the hopes and fears of both sides, but since the longer-term impacts of subsidising urban public transport are laregely unknown, nobody really knows where subsidy policy is leading or what will be forfeited if subsidy is eliminated. This paper traces the history of subsidisation, looks at the aims and impacts of subsidy and examines the available evidence concerning each of the major aspects. For covering abstract see IRRD 815370.