Lowering Transport Costs and Prices by Competition: Regulatory and Institutional Reforms in Low Income Countries

Abstract

High passenger and freight transport costs are a barrier to economic growth and social mobility, particularly in Low Income Countries (LICs). This paper considers the current state of knowledge regarding the barriers to achieving lower generalised transport costs. It considers both the road and railway modes across passenger and freight transport. These issues include a reform on the regulations for driver hours (preventing the road infrastructure from overloading), structuring rail concessions, increasing competition, and tackling corruption. Such reforms aim to deliver efficiency gains and service quality improvements at lower costs for users. This paper identifies the knowledge gap in previous research and concludes by setting out a research agenda that builds the evidence base for how the best practices from around the world can best be applied to the specific circumstances in Low Income Countries, with a particular focus on Sub-Saharan Africa and South Asia.