Publication: From Sidewalk to Subway: Achieving Sustainable Financing for Urban Transport
Loading...
Date
2016-06
ISSN
Published
2016-06
Author(s)
Editor(s)
Abstract
This brief talks about achieving sustainable financing for urban transport in developing countries. The state of urban travel in many developing countries is grim. Congestion and low-quality infrastructure, including limited network coverage and poor roads and sidewalks slow travel times, which slows economic development. Lower-income residents rely the most on public transport and bear a disproportionate share of the burden of its failures. The low quality of urban public transport systems in developing countries indicates a chronic financing gap, underfinancing for capital investments, operations, and maintenance. Though urbanization is an important ingredient in poverty reduction, it inevitably strains urban transport, so it is widening the financing gap. World Bank research released this year has pinpointed sources of the financing problem and proposed a response based on the concept of, "who benefits, pays." By tapping into innovative revenue sources that promote efficient pricing, increase overall revenue, and strengthen all elements of sustainable transport, urban areas in developing countries can fund a wide variety of urban transport projects in a manner that will ensure their sustainability. To conclude, by combining appropriate financing instruments and focusing on the “Who benefits, pays” principle, overburdened urban transport systems can be revived with wise and sustainable investments to cover capital, operation and maintenance of all parts of a transport system,“from the sidewalk to the subway.”
Link to Data Set
Citation
“Ardila-Gomez, Arturo; Ortegon-Sanchez, Adriana. 2016. From Sidewalk to Subway: Achieving Sustainable Financing for Urban Transport. Connections;2016(9). © World Bank. http://hdl.handle.net/10986/25011 License: CC BY 3.0 IGO.”
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Sustainable Urban Transport Financing from the Sidewalk to the Subway(Washington, DC: World Bank, 2016)Urban transport systems are essential for economic development and improving citizens' quality of life. To establish high-quality and affordable transport systems, cities must ensure their financial sustainability to fund new investments in infrastructure while also funding maintenance and operation of existing facilities and services. However, many cities in developing countries are stuck in an "underfunding trap" for urban transport, in which large up-front investments are needed for new transport infrastructure that will improve the still small-scale, and perhaps, poor-quality systems, but revenue is insufficient to cover maintenance and operation expenses, let alone new investment projects. The urban transport financing gap in these cities is further widened by the implicit subsidies for the use of private cars, which represent a minority of trips but contribute huge costs in terms of congestion, sprawl, accidents, and pollution. Using an analytical framework based on the concept of "Who Benefits Pays," 24 types of financing instruments are assessed in terms of their social, economic and environmental impacts and their ability to fund urban transport capital investments, operational expenses, and maintenance. Urban transport financing needs to be based on an appropriate mix of complementary financing instruments. In particular for capital investments, a combination of grants –from multiple levels of government– and loans together with investments through public private partnerships could finance large projects that benefit society. Moreover, the property tax emerges as a key financing instrument for capital, operation, and maintenance expenses. By choosing the most appropriate mix of financing instruments and focusing on wise investments, cities can design comprehensive financing for all types of urban transport projects, using multi-level innovative revenue sources that promote efficient pricing schemes, increase overall revenue, strengthen sustainable transport, and cover capital investments, operation, and maintenance for all parts of a public transport system, "from the sidewalk to the subway."Publication Land-Value Capture in Bogotá(Washington, DC: World Bank, 2025-05-28)This note presents a comprehensive analysis of Bogotá’s experience with the betterment levy—contribución de valorización (CV)—as a land value capture (LVC) instrument to finance urban transport infrastructure. Focusing on five major programs implemented in 1995, 2005, 2010, 2013, and 2018, the note draws critical lessons for cities in the developing world seeking sustainable, equitable, and locally anchored financing mechanisms. Unlike much of the existing literature that isolates the betterment levy from broader fiscal dynamics, this note situates the levy within Bogotá’s evolving tax ecosystem, including property and sales taxes, and highlights the pivotal role of a modernized cadaster. It shows that while the betterment levy has never fully financed transport projects on its own, it has consistently contributed to closing funding gaps, especially when paired with improved tax collection and strategic debt use. The note concludes with ten actionable lessons for other cities, emphasizing the importance of enabling legislation, affordability assessments, city-wide standards, and citizen participation. It also underscores the need to consider the total tax burden on residents and the political economy of earmarked revenues. Sound financing sources generate significantly more revenue than the cost of collecting it. Bogotá’s experience demonstrates that even partial revenue from betterment levies can be transformative when embedded in a robust fiscal and institutional framework.Publication Decarbonizing Cities by Improving Public Transport and Managing Land Use and Traffic(World Bank, Washington, DC, 2021-10)Urban transport is a significant contributor to climate-warming greenhouse gas (GHG) emissions in cities, with most urban transport emissions coming from cars. More than seventy percent of global carbon dioxide emissions come from cities, making mitigation efforts at the local level an important contributor to decarbonization. Urban transport also plays a fundamental role in the economic activity and welfare of urban citizens. Therefore, developing cities must find a way to continue to improve accessibility, while decoupling growth in travel demand from growth in GHG emissions. Affordable, safe, and convenient urban passenger mobility systems are critical for the welfare of urban residents, connecting people to jobs, education, health care, and recreation. This paper argues that cities in developing countries have a unique opportunity to preserve and encourage sustainable urban passenger mobility by building on their existing modal shares in public transport, walking, and biking the low carbon modes. Section 2 of this paper provides additional detail on key mobility and land use challenges that developing cities are facing. Section 3 outlines strategies to overcome the challenges. Section 4 summarizes the high-level takeaways and suggests a way forward for the international community to support city governments in providing better transport infrastructure, services, and enabling environments to ensure their long-term financial and environmental sustainability.Publication The Kingdom of the Bicycle(Elsevier, 2017-06)China used to be called “the Kingdom of the Bicycle,” but this is no longer the case. Bicycle use in China has been marginalized over the past 30 years. In contrast, the Netherlands has seen bicycle use grow since the 1970s. This paper—through a comparative analysis of data from Wuhan and Amsterdam—explores the reasons why the two countries have gone in different directions. Although these cities have different socio-demographics they experienced similar issues. This paper suggests lessons that Wuhan can learn from Amsterdam. However, these are one-way as it is considered that Amsterdam has little to learn from the decline of bicycle use in Wuhan.Publication Achieving Energy Savings by Intelligent Transportation Systems Investments in the Context of Smart Cities(World Bank, Washington, DC, 2016-04-28)Faced with the challenge of providing adequate transport services with limited resources, cities have, for several decades, been investing in Intelligent Transportation Systems (ITS). ITS utilize Information and Communications Technology (ICT) to make more efficient use of existing transport infrastructure with the aim of improving transport services and reducing congestion, accidents, and air pollution. In the past two decades, with the rapid advancement of ICT and intensive advocacy from big technology vendors, the concept of ‘smart cities’ has gained great popularity and many cities have started to undertake a more holistic approach to improving urban services using technology in the name of smart city initiatives. Section two introduces these themes, which serve as the analytical framework to understand how smart mobility investments lead to energy savings. The comparison in the search for similarities among the case studies and interviews helped us develop a conceptual model, emphasizing cause and effect and presented in section three, of how ITS deployment and operation in the context of smart cities leads to energy saving benefits. This conceptual model is presented with detailed discussions of institutional, technological, and physical conditions at each step in the model. Section four focuses on energy savings with quantitative evidence of energy saving potential of ITS investments collected from literature and case studies. Section five links the results of this study to the Wuhan Integrated Transport Development Project and how the knowledge has been incorporated into project design. To further explore the energy efficiency potential of Wuhan and to mainstream ITS and smart transport solutions as a source of achieving energy efficiency using results of this study, a TRACE analysis was also completed as part of this research effort. This analysis focused on the passenger transport sector. Finally, policy recommendations on the major conditions under which ITS investments in the context of smart cities achieve energy savings are summarized in Section 6 with specific implications for cities in the developing countries.
Users also downloaded
Showing related downloaded files
Publication World Development Report 2006(Washington, DC, 2005)This year’s Word Development Report (WDR), the twenty-eighth, looks at the role of equity in the development process. It defines equity in terms of two basic principles. The first is equal opportunities: that a person’s chances in life should be determined by his or her talents and efforts, rather than by pre-determined circumstances such as race, gender, social or family background. The second principle is the avoidance of extreme deprivation in outcomes, particularly in health, education and consumption levels. This principle thus includes the objective of poverty reduction. The report’s main message is that, in the long run, the pursuit of equity and the pursuit of economic prosperity are complementary. In addition to detailed chapters exploring these and related issues, the Report contains selected data from the World Development Indicators 2005‹an appendix of economic and social data for over 200 countries. This Report offers practical insights for policymakers, executives, scholars, and all those with an interest in economic development.Publication Doing Business 2014 : Understanding Regulations for Small and Medium-Size Enterprises(Washington, DC: World Bank Group, 2013-10-28)Eleventh in a series of annual reports comparing business regulation in 185 economies, Doing Business 2014 measures regulations affecting 11 areas of everyday business activity: Starting a business, Dealing with construction permits, Getting electricity, Registering property, Getting credit, Protecting investors, Paying taxes, Trading across borders, Enforcing contracts, Closing a business, Employing workers. The report updates all indicators as of June 1, 2013, ranks economies on their overall “ease of doing business”, and analyzes reforms to business regulation – identifying which economies are strengthening their business environment the most. The Doing Business reports illustrate how reforms in business regulations are being used to analyze economic outcomes for domestic entrepreneurs and for the wider economy. Doing Business is a flagship product by the World Bank and IFC that garners worldwide attention on regulatory barriers to entrepreneurship. More than 60 economies use the Doing Business indicators to shape reform agendas and monitor improvements on the ground. In addition, the Doing Business data has generated over 870 articles in peer-reviewed academic journals since its inception.Publication Classroom Assessment to Support Foundational Literacy(Washington, DC: World Bank, 2025-03-21)This document focuses primarily on how classroom assessment activities can measure students’ literacy skills as they progress along a learning trajectory towards reading fluently and with comprehension by the end of primary school grades. The document addresses considerations regarding the design and implementation of early grade reading classroom assessment, provides examples of assessment activities from a variety of countries and contexts, and discusses the importance of incorporating classroom assessment practices into teacher training and professional development opportunities for teachers. The structure of the document is as follows. The first section presents definitions and addresses basic questions on classroom assessment. Section 2 covers the intersection between assessment and early grade reading by discussing how learning assessment can measure early grade reading skills following the reading learning trajectory. Section 3 compares some of the most common early grade literacy assessment tools with respect to the early grade reading skills and developmental phases. Section 4 of the document addresses teacher training considerations in developing, scoring, and using early grade reading assessment. Additional issues in assessing reading skills in the classroom and using assessment results to improve teaching and learning are reviewed in section 5. Throughout the document, country cases are presented to demonstrate how assessment activities can be implemented in the classroom in different contexts.Publication World Development Report 2011(World Bank, 2011)The 2011 World development report looks across disciplines and experiences drawn from around the world to offer some ideas and practical recommendations on how to move beyond conflict and fragility and secure development. The key messages are important for all countries-low, middle, and high income-as well as for regional and global institutions: first, institutional legitimacy is the key to stability. When state institutions do not adequately protect citizens, guard against corruption, or provide access to justice; when markets do not provide job opportunities; or when communities have lost social cohesion-the likelihood of violent conflict increases. Second, investing in citizen security, justice, and jobs is essential to reducing violence. But there are major structural gaps in our collective capabilities to support these areas. Third, confronting this challenge effectively means that institutions need to change. International agencies and partners from other countries must adapt procedures so they can respond with agility and speed, a longer-term perspective, and greater staying power. Fourth, need to adopt a layered approach. Some problems can be addressed at the country level, but others need to be addressed at a regional level, such as developing markets that integrate insecure areas and pooling resources for building capacity Fifth, in adopting these approaches, need to be aware that the global landscape is changing. Regional institutions and middle income countries are playing a larger role. This means should pay more attention to south-south and south-north exchanges, and to the recent transition experiences of middle income countries.Publication Making Procurement Work Better – An Evaluation of the World Bank’s Procurement System(Washington, DC: World Bank, 2024-12-06)This evaluation assesses the results, successes, and challenges of the World Bank 2016 procurement reform. Procurements acquire the works, goods, and services necessary to achieve the World Bank’s project development outcomes. The World Bank’s procurement processes must ensure that clients get the best value for every development dollar. In 2016, the World Bank reformed its procurement system for Investment Project Financing and launched a new procurement framework aimed at enhancing the Bank’s development effectiveness through better procurement. The reform sought to reduce procurement bottlenecks impeding project performance and modernize procurement systems. It emphasized cutting edge international good practice principles and was intended to be accompanied by procurement capacity strengthening to help client countries. This evaluation offers three recommendations to scale up reform implementation and enhance portfolio and project performance: (i) Improve change management support for the reform’s implementation. (ii) Strategically strengthen country-level procurement capacity. (iii) Consistently manage the full spectrum of procurement risks to maximize project success.