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Open Access Publications from the University of California

Privatization of Transportation Investments


Over the past decade, there has been a wave of public support in many countries for privatization and deregulation in a number of indus­ tries. One of the industries in which privatization is most controversial is urban transportation. In some ways, urban transportation has been the most resistant to privatization, both in the intellectual/theoretical realm and in the political realm. Nevertheless, there is increasing dis­ cussion of privatization to transportation. Recently, the Governor of Massachusetts appointed a task force to study the possibility of privatiz­ ing the maintenance of highways, commuter rail lines, and Boston's Logan Airport (Wall Street journal, May 1, 1991) . There are talks of privatizing the airports of Philadelphia and Los Angeles, and of privatiz­ ing transportation services in other cities. In any case, the arguments for and against privatization are different in many ways for the transpor­ tation sector because of the unique characteristics of urban transporta­ tion markets. Among the special characteristics is the common expecta­ tion that urban transportation, unlike most commodities and services, should operate in order to meet a variety of social goals beyond mere efficiency, including distributional, environmental, and political goals.

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