central america | Policy design
Essays on the Political Economy of Transport Regulation in Costa Rica
The general objective of the thesis is to analyze the political economy of the regulation of Costa Rica’s transport sector and identify the main opportunities and challenges in designing a more integrated regulatory approach for the sector.
In the past decade, a series of policies intended to regulate the transport sector have been implemented in Costa Rica. Four key policies implemented in this period are fuel taxes, car taxes (import taxes and an annual technical inspection /emissions regulation fee), an annual circulation permit and a driving restriction program for the San José Metropolitan Area. Despite an increasing awareness of transport externalities such as air pollution, traffic congestion and traffic accidents, policy makers and stakeholders often act in response to interests that do not necessarily prioritize the resolution of these externalities. These and other transport-related problems have worsened in the past decade, evidencing the need to implement new policies and modify existing ones in order to better regulate the transport sector.
The general objective of the thesis is to analyze the political economy of the regulation of Costa Rica’s transport sector and identify the main opportunities and challenges in designing a more integrated regulatory approach for the sector. The first section consists of a qualitative analysis of the political economy of Costa Rica’s transport sector, with a focus on the four policies mentioned above. In this section, stakeholder analysis is used to assess the interactions between policymakers, legislators and consumers of transport services and goods. The following key questions regarding the implementation of the four selected policies are addressed: (i) Who were the important stakeholders involved in the decision-making process that led to the implementation of each program, and what were their main motivations? (ii)To what extent is the effectiveness of each program linked to the implementation of other policies that regulate the transport sector? (iii) Is there a more effective combination of policies that could reduce transport externalities? If so, what are the main political restrictions and difficulties in implementing this combination of policies? The second section consists of an econometric analysis of the effects of the Pico y Placa driving restriction program, which was significantly modified in July of 2008, on fuel consumption levels and air quality levels in the San José Metropolitan Area.
Ultimately, I hope to provide clear and well-organized information regarding the political economy of Costa Rica’s transport sector through the analysis of four policies that currently affect the regulation of that sector. I intend to recommend modifications to existing policies and suggest a more effective combination of policies in order to aid policy makers to better address environmental externalities related to the transport sector.
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