Call for Papers TRB - on pricing & privatizing roads
SUMMARY: The Transportation Economics Committee of the Transportation Research Board is seeking papers on "Issues relating to privatizing roads in the United States" for presentation at the TRB's Annual Meeting in Washington DC, January 13-17, 2013. The issues mentioned by the Committee are shown in its "Call for Papers", which is reproduced below.
Due to bureaucratic misunderstandings, the "Call For Papers" may not yet appear on the TRB's web site, but this need not prevent papers being submitted on this (or any other) topic. Papers have to be submitted in .pdf format before August 1, 2012. Guidelines for paper submissions are on web site http://pressamp.trb.org/submissions/default.asp?event=755
Papers submitted to the TRB are peer-reviewed, and may, or may not, be accepted for presentation or subsequent publication.
Questions about this "Call for Papers" may be addressed to Gabriel Roth, at email@example.com
ISSUES RELATING TO PRIVATIZING ROADS IN THE UNITED STATES
Call for Papers
The TRB Transportation Economics Committee ABE20
The US has an early history of privately provided toll roads but, since the advent of motorized road vehicles, the great majority of US roads have been owned by states or local governments. One of the principal obstacles to private ownership was the difficulty of obtaining direct payment for road use without requiring vehicles to stop at tollbooths.
However, the development of electronic toll collection methods such as E-ZPass, and the promise of even more sophisticated tolling systems, such as those based on the Global Positioning System (GPS), indicate that it will soon be technically practicable for road users to pay road providers directly for road use. Such direct payment methods enable roads to be brought into the market economy, and thus become not fiscal burdens on governments but economic assets provided by willing suppliers to willing customers (in the manner of food, water, telecommunications and other necessities), and paying land rents and taxes to appropriate levels of government.
The transition from government-provided roads to privately provided ones raises a number of issues that this call for papers would like authors to address. They include:
1. Advantages and disadvantages of private provision of public roads. Most economists are aware of the advantages (and disadvantages) of the market economy as a provider of public services. But there seem to be many in the transportation community unfamiliar with these issues. A review of the criteria justifying government provision of public services, and their application to roads, could be helpful, as well as comparisons of existing privately provided roads with government provided ones.
2. Institutional arrangements: Outright private ownership or long-term leases? Immediate changes in road ownership could be disruptive. Might long leases, binding private owners to maintain road networks to specified standards, be practicable?
3. The prices to be charged by private road owners, and the roles of price regulators. Ownership involves the right to set prices. Should private owners be given the power to set prices for the use of roads? Or might they be required to bid for proposed charges, as is often the case in the provision of water? What might be the implications for pricing the use of congested roads? To what extent could Adam Smith’s “Invisible Hand” be depended on to ensure that profit maximization is in the public interest? Would there be a role for price regulators?
4. The charging methods to be adopted. For private ownership to be effective, use of all roads would have to be charged for, otherwise traffic would shift from charged roads to uncharged ones, which could lead to local roads being frequently used by through traffic. What charging methods could ensure that use of all roads, including local ones, is charged for?
5. Effects on the size and quality of the road network, and on mobility and safety. Some suggest that the privatization of US roads could lead to a reduction of the size of US rural road networks, which could result in reduced mobility and higher freight costs. The likelihood and extent of such results merit investigation in the light of available evidence. For example, most of Sweden’s rural roads are owned by associations of private property owners,
6. Implications for freight transport. Private road owners may require trucks to pay more for road use than they are paying under government ownership. Or they might require charges to be based on axle loads (as in Oregon and New Zealand) rather than on the number of axles. Such changes could result in a reduction in trucking services and in an increase in the prices of the products they carry. Such possible effects could merit study.
7. Implications for rail transport. Changes in road use charges could impact the use of competing modes, especially railroads, which are currently regulated by the Surface Transportation Board. The effect of road privatization on other transportation modes could also merit study.
8. Transitional arrangements. It would take time to equip all vehicles, or all roads, with equipment necessary for the private provision of roads. So transition arrangements and periods would be necessary. How could effective transitions be organized? Could transition arrangements be made that would encourage voluntary participation by road owners and road users?
Many US road systems suffer from deterioration and congestion, while governments at all levels lack the resources deemed necessary to maintain and expand roads to meet growing needs. The pressures on government finances are expected to become more critical, so increasing numbers of road users and state officials are likely to seek participation of private suppliers, both to manage existing roads and to invest in increased capacity.