Road Fund

Abstract: Insufficient or uncertain budgetary allocations to road maintenance have resulted in road deterioration that has significantly increased production and transport costs in many countries. To avoid this problem, highway professionals advocate the establishment of dedicated road funds, managed by independent road boards made up of user representatives. The road boards would have the power to determine both the level of charges for road use and the level of expenditure on road maintenance. By contrast, macroeconomists and public finance specialists have tended to resist the establishment of dedicated road funds. They argue that road funds reduce fiscal flexibility, do not adequately address problems associated with the provision of public goods or the internalization of externalities, and often are not well managed. In general, there are two long-term institutional options for reconciling fiscal prudence with asset maintenance: a road agency that is operated commercially (subject to the normal oversight of behavior accorded to privatized monopolies), or a reformed and well-functioning budget process. This article argues that road funds must be viewed as a provisional, case-specific intermediate step in the direction of one of the long-term solutions. The role and nature of road funds should be assessed not on general principles but on a case-by-case basis through the analysis of likely micro- and macroeconomic effects. The article recommends indicators for use in specific cases to determine whether a road fund should be introduced, continued, or abolished.

Abstract: The World Health Organization (WHO) and the World Bank jointly issued the world report on road traffic injury prevention on world health day 2004, dedicated by the WHO to the improvement of global road safety. The report's publication signaled a growing concern in the global community about the scale of the health losses associated with escalating motorization and a recognition that urgent measures had to be taken to sustainably reduce their economic and social costs. The purpose of these guidelines is to promote a safe system approach to road safety management and specify a management and investment framework to support the successful implementation of the world report recommendations. The guidelines provide practical procedures designed for application at a country level to accelerate knowledge transfer and sustainably scale up investment to improve road safety results. It lays emphasis on strengthening institutional results management capacity reflects the essence and intention of the world report recommendations. It also recognizes that strengthened road safety management is required for the successful implementation of the good practice guidelines for interventions (helmets, drink driving, speed, and seat-belts) produced by the Federation Internationale de I'Automobile (FIA) foundation for the automobile and society, the global road safety partnership, the World Bank, and the WHO. This report is organized in following four chapters: chapter one gives introduction; chapter two presents world report recommendations; chapter three focuses on managing for results; and chapter four presents country implementation guidelines.

Abstract: A road network providing adequate connectivity across national territory is typically one of the most costly items of infrastructure that any country requires. It is also the one that has typically weighed most heavily on the national budget-with a strong character for public good-that has traditionally limited the scope for cost recovery. This review of the state of road networks in Sub-Saharan Africa provides a snapshot of the current state of evolution of the sector. The snapshot encompasses the maturity of the institutional framework, the adequacy of public finance, and the performance of networks. It focuses on exploring the interconnections between these three aspects, and in particular the extent to which institutional reform has contributed to improving sectoral finances and ultimately network condition. The study is organized as follows. Chapter two presents the overall anatomy of the Sub-Saharan African road network, comparing its basic attributes to road networks found in other developing regions. Chapter three describes the evolution of institutional reform in the sector and classifies countries according to the quality of these frameworks. Chapter four analyzes road sector expenditure trends relative to theoretical norms, and tries to explain differences in expenditure across countries using the typology described above. Chapter five focuses on road network condition, and uses the same typology to understand differences in country performance. Chapter six concludes.

Abstract: In the past, Road Funds have been criticized as inconsistent with effective expenditure control, as distorting the allocation of public sector resources, and as incompatible with efficient management of government resources. This paper considers whether there is a case for a more benevolent view of the new “second generation” dedicated Road Funds, which have emerged in recent years. The paper concludes that, where a Road Fund pursues a genuine purchasing agency approach, then in principle it can be an efficient means of delivering road maintenance and, perhaps road capital expenditures. But a formidable list of institutional and financial requirements would have to be satisfied for a dedicated Road Fund to be appropriate. These conditions are more likely to be satisfied in developed economies, with efficient budgetary systems already in place. In many developing countries, the better solution may be to reform overall budget institutions, procedures and practices. But if the institutional and financial requirements for an efficient fund can be met, a Road Fund may be appropriate. The question is just how often the right conditions will arise.