Laying the foundations for long-term, sustainable economic development will require adopting innovative policy solutions to overcome obstacles to growth. Unfortunately, implementing new policy is often politically unpopular, especially when the change involves levying a new charge or increasing taxes to fund investment or influence behavior.
A case in point was illustrated in a presentation given by Dr. Jonas Eliasson of Stockholm’s Royal Institute of Technology at a recent Earth Day event in Chicago. Like most major metropolitan areas, the Swedish capital had long suffered from acute traffic congestion and all of the economic and environmental problems associated with it. Beginning in the early 1990’s, academics and policy experts had discussed the potential solution offered by “congestion pricing,” whereby drivers pay a fee for use of the city’s roads, the level of which depends upon the time of day and the “zone” of the city in which the driver is traveling.