[sustran] Poverty alleviation, basic mobility & the informal sector

Wendell Cox wcox at publicpurpose.com
Tue May 20 22:58:10 JST 1997


Introduction....

Having already contributed a comment, I should introduce myself (after which
I will comment on Jeff Turner's contribution).

INTRODUCTION.....

I was a three term member of the Los Angeles County Transportation
Commission, which oversaw both public transport and highways in Los Angeles
County (8 million people) from 1977 to the early 1990s.

Since 1985 I have been a consultant specializing in public transport
performance, especially efficiency improvements through competitive
approaches, such as competitive tendering.

I tend to come at the issue of sustainable transport from a slightly
different perspective than most.

1. I believe that we should recognize that automobile technology is getting
a good deal better --- that in the future the emissions problem may well be
completely solved, and that great progress has been made so far. With ITS
automated highway technology on the distant horizon, it is possible that
there will be a "marriage" between public transport and highways. My point
here is to urge openness to the prospect that the auto may well be a
significant part of the long term sustainable transport solution. 

2. Sustainability has to do not only with environental, traffic and land use
factors. It also has to do with finances. The US/western European model of
relying on public monopolies to provide public transport is not sustainable
economically. In the monopoly environment, unit costs (per km or hour) tend
to rise above inflation, creating a perpetual need for more subsidies or
higher fares to provide the same or lower levels of service. There is
evidence that a major contributor to the rapidly declining ridership in the
largest US systems is directly attributable to fare increases. That is where
competition comes in --- especially competitive tendering, which provides
the incentive that allows unit costs to be controlled, and to produce more
service with existing subsidy and fare levels. The reality of public finance
in the developed world is that there will never be enough public money to
fund public monopolies that continually require larger subsidies to produce
the same level of service --- that is, in the longer run the public monopoly
approach to public transport is not sustainable from an economic standpoint
(neither is the private monopoly approach). Of course, there is great
progress being made on this front, especially in Europe, New Zealand and
Australia, where systems are being converted to competitive tendering. The
lesson, I believe, for developing nations, is not to establish public
transport monopolies. Instead, models that encourage the informal sector,
deregulated bus service should be employed. And, government can play the
role of coordination and tender for services that are not provided by the
market.

RESPONSE TO JEFF TURNER COMMENT

>I would like to contribute 2 comments to the discussion on possible
>sources and consideration for any policy paper on this subject. Any
>policy paper should mention:
>
>1. The importance of the informal transport sector to the lives of
>     low-income city dwellers in  developing countries.
>
The problem exists in developed countries as well. A good example is New
York City, where federal, state and local law effectively preclude the
informal sector from providing transport that is desired by lower income
people (van and jitney service). In many ways the transport market in the
outer boroughs of NYC is similar to that of major cities in developing
nations. Special interests --- especially trade unions and the vested
interests of public and private transport monopolies unnecessarily restrict
mobility, making the achievement of societal goals more difficult (poverty
alleviation, welfare reform, air pollution abatement, traffic congestion, etc). 

In the US, where there is a strong market for second-hand (used)
automobiles, the urban poor tend to switch to autos as soon as they have the
financial means.

These counterproductive urban transport policies exist throughout the US. At
one point, before state and local laws drove them out of business, the
informal sector in Miami was carrying more daily riders than Miami's billion
dollar rail system. Owners tended to be minorities and recent immigrants.

Los Angeles, with its large poor and recent immigrant population is another
prime market for expansion (or perhaps establishment would be a more
accurate word) of an informal sector. There is considerable support for such
policies, even inside public transport bureaucracies, but insufficient to
get the policies changed.

All of this arises from an institutional environment in which the interests
of those who work in urban transport takes precedence over those of the
community and those who require mobility.

A major challenge for developing nations will be to ensure that transport
policies serve public purposes, not private purposes. Unfortunately, we have
fallen far short of that in the US.

Wendell Cox
WENDELL COX CONSULTANCY
International Public Policy, Economics, Labour, Transport & Strategic Planning
The Public Purpose: Internet Public Policy Journal
http://www.publicpurpose.com
Voice +1 618 632 8507; Fax  +1 618 632 8538
P.O. Box 8083;. Belleville, Illinois 62222 USA



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