Does Transport Really Impact Local Economic Development?



Does Transport Really Impact Local Economic Development?

Authors

Lynne Miles, Arup; What Works Centre for Local Economic Growth

Description

The UK What Works Centre for Local Economic Growth found that transport can have positive impacts on the local economy, but its role may not be as clear as often assumed and good evaluation is surprisingly rare. What does this mean for policy makers?

Abstract

The UK’s ‘What Works Centre for Local Economic Growth’ has spent the last two years systematically reviewing the high quality evaluation evidence to analyse which policies are most effective in supporting and increasing local economic growth.

In 2015 the Centre published its review of Transport Policy and, in 2016, a ‘toolkit’ which practitioners can consult to decide what works better when designing new public transport policy for their areas.

The review found that Transport can have a positive impact on the local economy, although the role of transport in stimulating growth is not as clear-cut as assumed by many decision makers.

The review considered around 2,300 evaluations from OECD countries. It found 29 impact evaluations that met the Centre’s minimum standards. Many of its findings depend on a small number of studies. They are, however, consistent with other research on the economic impact of transport improvements.

The evidence showed that road projects can positively impact local employment. But their effects are not always positive, and a majority of evaluations show no (or mixed) effects on employment. Evidence suggests road projects may increase firm entry without necessarily increasing the number of businesses overall (because of displacement). There is some evidence of road projects having a positive impact on population, wages, incomes, property prices and productivity.

The WWC found no high quality evidence on the impact of rail infrastructure on employment, although there is evidence that rail projects tend to have a property price impact.

We found no high quality evaluations that provide evidence on the impacts of trams, buses, cycling and walking schemes on any economic outcomes.

Surprisingly few evaluations consider the impact of transport investment on productivity, despite the use of productivity effects to calculate ‘wider economic benefits’ in transport appraisal being widespread.

We also have little evidence that would allow us to draw conclusions on whether large-scale projects (e.g. high speed rail or motorway construction) have larger economic growth impacts than spending similar amounts on a collection of small-scale projects (e.g. light rail or junction improvements).

Indeed, one of the key findings of the review is the paucity of high quality evaluation of transport impacts. Why are transport projects so poorly evaluated and what can be done about it?

This paper takes the findings of the What Works Centre systematic review (and subsequent user toolkits) as its starting point, and considers the implications for policy makers and funders across Europe, including ways in which policy makers and scheme promoters can design their programmes in order that their impacts can be properly evaluated.

Publisher

Association for European Transport