Competitive Cities : The network and long-term impacts of fiscal management of transport demand

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Cities compete with each other. For more than fifty years, Public Choice Theory has explored the notion that cities compete to attract and retain residents and businesses. Likewise, the Public Finance & Tax Competition literature identifies competition between cities on tax-and-spend policies. The evidence base suggests 'inter-city competition increases the likelihood cities will pursue a limited strategy versus a balanced or more progressive approach'. In the transport sector, fiscal demand management policies such as road user charging, workplace parking levies and parking charges are therefore issues upon which cities may compete. Both residents and businesses are deeply concerned about the implications of changes to charging regimes. The negative impacts they foresee may in turn influence not only transport decisions, but also (in the long run) location decisions. Thus, there are indirect impacts on the local economy, which provides a stimulus for inter-city competition. Buchan (2008), reviewing policies to combat climate change impacts from transport, concluded that a nationally-imposed parking charge on new developments was necessary, in order 'to avoid local authority fears of destructive competition from neighbouring authorities'. Fiscal management of transport demand is therefore a clear potential source of competition between cities, yet there is little research to guide us on how strong this competition might be, how much of the competitive pressure is real or perceived, and how it should affect the design, implementation and overall effectiveness of fiscal demand management policies. Our research will study the issues surrounding the design and implementation of parking and charging policies looking more specifically at competing cities with the aim to answer the following policy questions :- In what ways do and could cities compete using fiscal demand management policies? How should cities design their policies to achieve individual and collective 'best' outcomes? Should cities consider sharing revenue streams - should they compete or co-operate? How significant are these policies to the redistribution of business and residents between cities? What, if any, implications do the results have for the co-ordination of demand management policies?The research will be based on a mix of in-depth interviews with selected cities and mathematical models of competition between cities covering both short term and long term dynamics and behaviour of relevant stakeholders.