Government Failure in Urban Transportation
Aei-Brookings Joint Center For Reg. Studies Working Paper No. 00-8
32 Pages Posted: 8 Dec 2000
Date Written: November 2000
This paper assesses governmental performance in its investment, provision, and regulation of urban transportation. Attention is given to public bus and rail transit and road transportation. Evidence based on urban transport in U.S. cities reveals substantial allocative and technical inefficiencies that have led to large public transit deficits and severe highway congestion.
I argue that it is futile to expect public officials to remedy the situation by pursuing more efficient policies, such as congestion pricing and weighing costs and benefits when deciding transit service. The problem is that urban transportation policy is largely shaped by entrenched political forces that inhibit constructive change. The only realistic way to improve the system is to shield it from those influences and expose it to market forces by privatizing it. This position is supported by empirical evidence based on simulations for the United States and the United Kingdom?s early experience with privatization.
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