The prime reason governments intervene in the transport policy domain is often stated at deriving from some form of “market failure”. That is to say, if things were left to individual firms and persons in our society, a sub-optimal, or more likely unacceptable situation would arise.
A classic example of transport policy intervention occurs in public transport, which generally operates at a loss, so no private sector provider would provide services for those who cannot access a private car. Social exclusion occurs. And of course, when a lot of cars try to access a busy place, such as a CBD, congestion and other unacceptable impacts like air pollution arise. [Read more…]