Pakistan Institute of Development Economics



Policy Options for Financing Urban Transportation in Resource Constrained Environments: The Case of Lahore, Pakistan

In all prosperous and modern economies, cities are the engines of growth and melting pots of diversely talented individuals. They offer inclusive environments with openness and access to opportunities, enabled by efficient and affordable transport systems leading to economically productive interaction between citizens. On the other hand, many cities in rapidly urbanising developing countries have not been able to develop efficient spatial structures, which results in traffic congestion and poor transport services. Their resource-constrained governments often struggle to fill gaps in transport infrastructure demand, which in the case of megacities requires mass transit projects. In the case of Lahore, Pakistan, however, the Provincial and Federal governments appear deeply committed to undertaking mass transit services despite chronic fiscal and financial constraints. The paper first explores Lahore’s urban form and function from the transportation and land-use perspectives, presenting an in-depth sub-city level analysis of spatial variations in key characteristics. Second, by undertaking a review of transport infrastructure financing literature it evaluates the viability of three main policy options in Lahore, including public private partnerships, municipal finance options and reforming urban land-use zoning. It concludes that governments in such environments could benefit from land-financing by utilising centrally located State-owned lands through market oriented land-use regulation reforms.

Ammar A. Malik