The road pricing literature tends to form two separate strands. One deals with congestion pricing and its investment counterpart, capacity. The other concerns road damage and its investment counterpart pavement durability. Congestion is seen as largely an urban issue and road damage as a rural issue. This paper discusses the economic theory of each in turn, then considers them together. Economically optimal pricing will lead to under-recovery of total costs for rural roads and possibly also for urban roads. Ways to fully recover costs and to tax road use with the least loss of economic efficiency are discussed. The total cost of road provision is not an optimal revenue target in any economic sense. The only credible justification for attempting to recover exact total costs from users is the 'user pays' concept of equity. (a).
Abstract