01122627

Component

This paper analyzes governance choice in a two-level federation in the provision of road infrastructure across jurisdictions. It is demonstrated, on a serial road network shared by two districts, that residents' preferences for public spending on road infrastructure are differentiated by where they live and where they travel. In consideration of differentiated travel demand and spending preferences over space, a two-stage imperfect information game is constructed to predict the choice of centralized or decentralized spending structure in a representative democracy, and accordingly spending decisions at either a central or a local level. Two models have been proposed. While the first model considers simple Pigouvian behavior of governments, the second explicitly models political forces at both a local and central level. At a local level, residents in each district vote for representatives and delegate their spending decision to elected representatives. At a central level, spending decisions are made in a legislature of locally elected representatives. Both models led to the conclusions that a centralized or decentralized spending structure is chosen based on a satisfactory comprise between benefits and costs associated with alternative decision making processes, and that governance choice may shift as the infrastructure improves over time.

01120148

09-1137

English

23p

2009

Transportation Research Board 88th Annual Meeting

DVD

Appendices; Figures (4) ; References; Tables (1)

Finance; Infrastructure; Maintenance; Types of roads by jurisdiction; Types of roads by network

Finance; Highways; I10: Economics and Administration

Transportation Research Board Annual Meeting 2009 Paper #09-1137

TRIS, TRB

Jan 30 2009 5:21PM