Last Exit: Privatization and Deregulation of the U.S. Transportation System

Last Exit: Privatization and Deregulation of the U.S. Transportation System

In Last Exit Clifford Winston reminds us that transportation services and infrastructure in the United States were originally introduced by private firms. The case for subsequent public ownership and management of the system was weak, in his view, and here he assesses the case for privatization and deregulation to greatly improve Americans' satisfaction with their transportation systems. "A half-century of economics research, much of it from Brookings, convincingly shows that deregulation of transportation services delivered enormous benefits. "Last Exit" argues persuasively that these benefits are limited by continuing public provision of infrastructure and regulation or public provision of some services. Clifford Winston proposes experiments in private provision of airports, highways, and urban passenger transportation, and more efficient usage pricing for infrastructure, to test the strong theoretical case for increasing the scope of privatization and deregulation. These provocative but measured proposals provide the agenda for a serious national debate on the next steps in reforming transportation policy."--Roger Noll, Stanford University "Clifford Winston offers a blueprint for increasing the role of the private sector in providing U.S. transportation infrastructure. He makes the case that public sector exit can improve economic efficiency, speed technological advance, and help solve current fiscal pressures."--Betsy Bailey, University of Pennsylvania "Winston pulls together the first comprehensive accounting of the many inefficiencies that arise from current public policies in transportation. The bill--amounting to $100 billion per year plus reduced innovation--will hopefully stimulate some of the experiments he advocates with increased private provision of transportation."--Tony Gomez-Ibanez, Harvard University Clifford Winston is a senior fellow in Economic Studies at the Brookings Institution. His previous books include Aviation Infrastructure Performance and Government Failure versus Market Failure , both published by Brookings. Last Exit Privatization and Deregulation of the U.S. Transportation System By Clifford Winston Brookings Institution Press Copyright © 2010 THE BROOKINGS INSTITUTION All right reserved. ISBN: 978-0-8157-0473-7 Contents Acknowledgments..............................................................................................................ix1 Back to the Future to Improve U.S. Transportation..........................................................................12 Intercity Transportation under Partial Deregulation........................................................................213 Highways...................................................................................................................384 Urban Transit..............................................................................................................615 Airports and Air Traffic Control...........................................................................................766 Constraints on Efficient Reforms...........................................................................................1027 Lessons from Deregulation of Intercity Transportation......................................................................1138 Theory and Evidence on the Economic Effects of Privatization...............................................................1259 Privatization Experiments..................................................................................................14510 Conclusion................................................................................................................163References...................................................................................................................167Index........................................................................................................................179 Chapter One Back to the Future to Improve U.S. Transportation The philosophy of one century is the common sense of the next. Henry Ward Beecher From ocean voyages to flights into outer space, new ways of traveling generate excitement because they expand opportunities for travelers to visit faraway places and to reach their destinations faster. Today, Americans' interest in new travel options has been piqued by the possibility of high-speed rail service that exceeds 300 miles an hour and by supersonic air service that does little damage to the environment. At the same time, most travelers would be ecstatic if they could drive on well-maintained roads at posted speed limits during rush hours, fly on airplanes that arrived at their destinations on time, and commute on buses and subways that provided safe, reliable, and clean service. Instead they are frustrated by a variety of problems with the nation's transportation system and disillusioned with public officials who seem incapable of enac