Abstract
Unstable external funding sources for large-scale transport infrastructure prompts many East Asian countries to strengthen capacity in self-financing transport investments. This paper aims to evaluate if earmarking of road-related tax revenues for transport investments answers the need of developing countries to fund needed infrastructure to sustain economic growth. Funding issues relevant to the need for a long-term funding instrument, and the current structure of road-related taxes are presented to build empirical contexts of the potential of linking tax revenues and transport investment needs. Some lessons from long run transport funds in Japan and the US are also presented to articulate the idea of earmarking. Finally, we propose a dynamic framework illustrating vicious cycle of funding gap in transport affecting growth potential. In the structure, we propose a transport earmarking financed by transport-related tax showing its effectiveness breaking the vicious cycle in funding infrastructure in developing EA countries.
