Commercialization and Deregulation of Transport Industries — Theoretical Approaches and Lessons

Abstract

There had been a long history of regulation of transport for economic and social reasons and in virtually all countries a massive edifice of legal structures were developed to control its supply and use. This has changed dramatically as the perceptions of the role of transport have altered, our understanding of economic forces has evolved, and there have been technology shifts. The transport networks began to be deregulated in the late 1960s with the passing of the UK's 1968 Transport Act but the process accelerated in the 1970s when in 1978 the US's Airline Deregulation Act was enacted. We have now acquired a relatively large body of evidence of how various forms of liberalized transport network markets function. Here we examine the initial rationale for regulating transport networks, consider why there has been such a dramatic change in perspective, and explore whether subsequent changes to the institutional structure have fulfilled their objectives. In this latter context, there is discussion of some of the outstanding problems that have still to be resolved in this more commercial driven environment and especially those posed by differential approaches to the regulation of network users and network infrastructure suppliers.