From Area Licensing to Electronic Road Pricing: A Case Study in Vehicle Restraint

The urban transport problem is usually perceived as a disequilibrium, at peak times, between the supply of transport infrastructure and the demand for the use of this infrastructure by an increasing population for more journeys. Given the consequent problems of congestion and the environmental constraints acting against any substantial increase in road capacity, the ultimate necessity to restrain the use of the private car is obvious. Policy makers have responded with a range of vehicle restraint measures including petrol taxes, parking controls, traffic management, etc., all of which have contributed to the containment of the problem but are also recognised as short-term palliatives pending the implementation of more radical solutions. Transport economists have generally argued that the only comprehensive long-term solution lies with the introduction of road pricing, and this paper evaluates Singapore's unique experience in actually employing the price mechanism to ration more effectively the use of roads during periods of peak demand, and considers some of the ramifications of such a policy.