Decision Making and Government Policy in the Transport Sector

Abstract

The intervention of government in the transport sector may be based on two different though related arguments. The first argument is based upon the quality of private decision making, in terms of the information available, the time scale adopted and the motives of the decision makers. As such it is fundamentally a critique of managerial efficiency in free enterprise systems. The second argument is more fundamental in that it identifies the reasons for intervention in the nature of transport itself. Among these are the ‘indirect’ nature of transport demand, and the important externalities associated with many aspects of transport which affect the efficiency of the transport sector itself and the economy and society as a whole. This case for government intervention is so strong that governments throughout the world, regardless of ideology, have accepted the need for intervention in the transport sector. In doing so they have developed new forms of project appraisal which are reviewed in the first section of this chapter. The remaining sections concern the provision of network capacity, the provision of public service vehicle capacity and the allocation of traffic to alternative modes.