Internalising the Externalities of Public Transport in Botswana

Abstract

In this paper, the externalities generated by public transport and the economics of road pricing are analysed. A case study of Botswana shows the imbalance between the supply and demand for road space as the underlying cause of traffic congestion. Empirically, the determinants of private motor vehicle ownership in Botswana are: credit to the private sector, the exchange rate, and road space. An optimal solution to the problem of traffic congestion in the country requires internalisation of the externalities generated by public transport. Without efforts to internalise the externalities of public transport, private car ownership becomes attractive but worsens traffic congestion and the costs of congestion. Road pricing is one way to internalise the externalities of public transport. This is the approach used by Singapore and other countries. The paper shows how aspects of the scheme can be used in Botswana.