European Regional Science Association
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European Regional Science Association
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The abstract for paper number 97:
Floris W. C.J. Van de Vooren, Ministry of Transport, Public Works and Water Management, The Netherlands;
University of Antwerp, Maastricht, The Netherlands, Tom Pauwels, University of Antwerp, Antwerpen, Belgium
Improvement of infrastructure: spatial effects and financing
Improvement of infrastructure is an important tool of transport policy. The question arises how and in which extent an improvement of the infrastructure influences the economy in space and time. For an adequate answer, two relationships must be taken into account: (1) the interaction between the economy and transport: the economy influences transport and transport influences the economy; (2) the way of financing the improvement of the infrastructure and its influence on the economy and transport; this relationship is important in case of large projects of infrastructure.
The paper describes these relationships, as they have been specified in the (extended) model MOBILEC (MOBILity/EConomy). This is a dynamic, interregional model about economy, mobility, infrastructure and other regional features. A specific way of financing improvements of infrastructure can be put into the model. We consider the following ways of financing: (1) reduction of other government spending; (2) increase of direct taxes; (3) increase of indirect taxes, including a levy on mobility; (4) increase of the government deficit; (5) private financing. These ways of financing and the spatial distribution and allocation of the resources are specified in the paper. Attention is paid to passing on additional burdens to other economic subjects.
On the basis of these theoretical considerations, we make an empirical study in the form of a scenario analysis for total Belgium (federal level), its three regions (Flemish Region, Brussels Metropolitan Region and Walloon Region) and its most important arrondissements (subregions)over the period 2000-2030. It is performed with the help of the model MOBILEC-Belgium, which gives a spatial differentiation to the 43 Belgian arrondissements.
A reference scenario is presented, where the capacity of the road capacity is constant in the course of time. The travel time of the road traffic depends on the utilization of the road capacity: more vehicles on a certain stretch of infrastructure imply lower velocity and therefore longer travel time. Substitution for other transport modes is possible.
Then several extension scenarios are formulated where the capacity of the road infrastructure is extended in all arrondissements in such a way that travel time of the road traffic does not rise in spite of the increasing road traffic. The only difference between these extension scenarios is the way of financing.
The extension scenarios are compared with the reference scenario. It shows the spatial effects that the extension scenarios generate, in terms of value-added and employment by arrondissement. In the framework of a cost-benefit analysis, the benefits of the extension scenarios in the form of additional value-added are set against the costs of the improvement of the infrastructure, on the federal level as well as the level of the regions and the arrondissements.
Unfortunately full paper has not been submitted.