This page offers an overview of why we are interested in transport as a means of encouraging local economic growth and offers insight on what does and doesn’t work in this policy area.
It summarises some of the evidence we already have on what works when delivering these types of programmes, provides guidance on what we know about the effectiveness of different ‘design features’, and offers some thoughts on improving evaluation as well as some case study examples. Throughout the page you’ll find links to further resources including a more detailed discussion of why we look at transport, our full evidence review and where the gaps in the evidence are, our toolkits, as well as evaluation resources.
What do we mean by transport and how can it deliver local economic growth?
Much of our work has focused on one of three areas: physical interventions which expand or improve transport infrastructure; service enhancement relating to the quality or frequency of transportation; or interventions which change the way transport is supplied or used, either by providing subsidies or changing the ownership and operation of services.
From a local economic growth prospective, transport spending has two main aims:
- To reduce transport costs to businesses and commuters (for example by reducing congestion – and thus saving time – or by reducing fares).
- To stimulate the economy, for example, by raising the productivity of existing firms and workers, or by attracting new firms and private sector investment.
What does the evidence on transport show?
Road projects can positively impact local employment, although some investments don’t generate measurable effects.
Road projects may increase firm entry – both through new firms starting up or existing ones relocating – although the overall number of firms tends to stay the same (which suggests that new firms displace existing firms).
Road and rail projects tend to have a positive effect on property prices, but in both cases the effects can vary over time.
There is some evidence that road projects may also have a positive effect on productivity and wages.
What policymakers need to know when designing transport programmes
The existing evidence base provides some guidance on how to develop transport investment programmes to improve policy effectiveness. Some of this evidence is discussed in our evidence review, with additional evidence on particular aspects of programme design summarised in our toolkits.
We have policy design guidance available on the following areas:
What policymakers and academics need to know when evaluating transport programmes
While there are a number of good reasons to improve transport infrastructure, the evidence on local economic benefits is not clear cut.
It is widely believed that spending on transport infrastructure in less economically successful areas will provide a strong stimulus to economic activity. The available evidence does not support this claim.
There is little evidence to demonstrate that large scale projects – such as high speed rail - have a bigger economic impact than spending the same amount of money on a collection of smaller scale projects. With major rail projects in the pipeline, it will be essential that robust evaluation on the economic impact of these projects takes place.
More generally, it is very important that evaluation and appraisal are better linked to help improve scheme prioritisation. Our evidence review and page on evidence gaps contains a number of detailed recommendations.
To help practitioners evaluate future transport projects, below is an example of good practice in this area:
You can learn more about how we rank evaluations using the Scientific Methods Scale.