Abstract: Studies reveal that investments in urban roads have been justified on the basis of factors such as economic development, congestion relief, time saving, increased safety and better social and environmental outcomes. The critics, however, think that increased investments in urban roads and state highways result in additional congestion and parking problems. These factors then impede economic development and sometimes leave reverse development impacts. An analysis of urban transport policies of New Zealand and Pakistan reveals that both the countries are making huge investments in building roads. The two countries consider roads investments as vital for economic growth, development and productivity. New Zealand does have a better transport policy institutional structure than Pakistan resulting in better transport policymaking and implementation mechanisms both at national and local levels. Pakistan lacks institutional capacity to formulate a coherent transport policy document both at federal and provincial levels. New Zealand and Pakistan, being developed and developing countries respectively, have different institutional structures but their transport policies lay greater emphasis on building roads. A critical transport policy review the two countries suggest the presence of ‘planning fallacy’. Therefore, the question ‘why New Zealand and Pakistan experience the planning fallacy despite different transport policy institutional structures?’ needs to be investigated. This paper aims to evaluate and look through various theoretical lenses to address this question.