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Government Failure in Urban Transportation

  • Clifford Winston

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 US 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 privatising it. This position is supported by empirical evidence based on simulations for the US and the UK’s early experience with privatisation.

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File URL: http://www.ifs.org.uk/fs/articles/0030a.pdf
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Article provided by Institute for Fiscal Studies in its journal Fiscal Studies.

Volume (Year): 21 (2000)
Issue (Month): 4 (December)
Pages: 403-425

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Handle: RePEc:ifs:fistud:v:21:y:2000:i:4:p:403-425
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  1. Clifford Winston, 1998. "U.S. Industry Adjustment to Economic Deregulation," Journal of Economic Perspectives, American Economic Association, vol. 12(3), pages 89-110, Summer.
  2. Walters, A. A., 1982. "Externalities in urban buses," Journal of Urban Economics, Elsevier, vol. 11(1), pages 60-72, January.
  3. Peltzman, Sam, 1992. "Voters as Fiscal Conservatives," The Quarterly Journal of Economics, MIT Press, vol. 107(2), pages 327-61, May.
  4. Pashigian, B Peter, 1976. "Consequences and Causes of Public Ownership of Urban Transit Facilities," Journal of Political Economy, University of Chicago Press, vol. 84(6), pages 1239-59, December.
  5. Lave, Charles, 1991. "Measuring the Decline in Transit Productivity in the U.S," University of California Transportation Center, Working Papers qt63g5j4z4, University of California Transportation Center.
  6. Calfee, John & Winston, Clifford, 1998. "The value of automobile travel time: implications for congestion policy," Journal of Public Economics, Elsevier, vol. 69(1), pages 83-102, July.
  7. Karlaftis, Matthew & McCarthy, Patrick, 1999. "The Effect of Privatization on Public Transit Costs," Journal of Regulatory Economics, Springer, vol. 16(1), pages 27-43, July.
  8. David M. Newbery & Georgina Santos, 1999. "Road taxes, road user charges and earmarking," Fiscal Studies, Institute for Fiscal Studies, vol. 20(2), pages 103-132, June.
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