October 02, 2006

Billions of dollars and an overwhelming amount of time are wasted every year in traffic congestion. Might there be relief in sight? Earlier this year, former Transportation Secretary Norman Mineta announced a federal initiative to relieve transportation congestion, largely with the help of private fees and tolls. "Congestion is not a fact of life," rightly declared Mr. Mineta, "We need a new approach, and we need it now." One such approach would be to enable the market economy, on which we depend for most other goods and services, to also provide roads. Toll roads were privately supplied two hundred years ago on a large scale in both the U.S. and the UK. Their private provision today is even more practical because modern technology enables customers to pay for road use without tollbooths, and even without vehicles having to stop.

Services such as electricity, telecommunications and water supply are provided commercially in many parts of the country in response to demand from consumers; most of whom pay the costs associated with their choices, and expect to get what they pay for. In the past decade, the private sector has begun to develop express toll lanes in many parts of the country.  In fact, ten years ago, the California Private Transportation Company provided, in the median of California's State Route 91, the first "Express Toll Lanes" with variable tolls, electronically collected, designed to ensure congestion-free travel at all times.

California's pioneering Express Toll Lanes have since been replicated on portions of publicly owned roads such as California's Interstate 15, Minnesota's Interstate 394, and Denver's Interstate 25. They give consumers the choice of paying for faster travel on less congested roadways that reliably and predictably get them to their destinations on time. This holds true whether the journey involves picking up a child from day care on time or supplying a business with just-in-time materials delivery. The use of these toll lanes is increasing, especially by women.

The pace of privatization has quickened in recent years:

• A private consortium led by CINTRA/Macquarie has paid the city of Chicago $1.83 billion to allow it to receive the Chicago Skyway tolls for 99 years, and is buying the State of Indiana's toll road for $3.85 billion. 

• To relieve congestion on the Washington Beltway, the Virginia Department of Transportation has approved a proposal from Fluor Enterprises to add four HOT (High-Occupancy or Toll) lanes to a 14-mile segment of the Beltway at a cost of nearly a billion dollars. These lanes are to be financed by electronically collected tolls, varied to ensure congestion-free travel at all times.

• The biggest private road investment proposed to date is $7.2 billion for the first major project of the Trans-Texas Corridor from north of Dallas to south of San Antonio.

The cities of London and Stockholm, under the control of socialist administrations, have drastically reduced traffic congestion in their centers by the use of modern tolling methods, and are dedicating surplus revenues to improve public transportation.

The diversion of surplus road use revenues to non-road purposes is not confined to socialist administrations. It is also taken for granted in the U.S. For example, in 2005 Congress voted to finance, out of monies paid for road use, Virginia's proposed $4 billion 23-mile rail connection to Dulles International Airport, even if that project were not to meet the relevant federal standards, and even though superior service with express buses could be provided at a third of the cost. Virginia's financial contribution to this wasteful project is to come from increased tolls on the parallel Dulles Toll Road, which was built to serve, and continues to serve, non-airport traffic.

Road funding has been mismanaged by politicians long enough. The inadequacies of politically inspired projects such as Boston's $14.6 billion "Big Dig" are now apparent to all. Roads are too important to be left to the vicissitudes of politics. The time has come to unleash the power of the private sector to deliver to road users the innovation, cost savings, quality and choice we take for granted in telecommunications and other services.

Ivan Eland is Director of the Center on Peace & Liberty at The Independent Institute and Assistant Editor of The Independent Review. Dr. Eland is a graduate of Iowa State University and received an M.B.A. in applied economics and Ph.D. in national security policy from George Washington University. He has been Director of Defense Policy Studies at the Cato Institute, Principal Defense Analyst at the Congressional Budget Office, Evaluator-in-Charge (national security and intelligence) for the U.S. General Accounting Office, and Investigator for the House Foreign Affairs Committee. Full Biography and Recent Publications

Pierre Lemieux is an economist and co-director of the Economics and Liberty Research Group at the Université du Québec en Outaouais and a Research Fellow at The Independent Institute in Oakland, California.

Alexander Tabarrok is research director at The Independent Institute, associate professor of economics at George Mason University, editor of the Independent Institute books, Entrepreneurial Economics, The Voluntary City (with D. Beito and P. Gordon), and Changing the Guard: Private Prisons and the Control of Crime.

Alvaro Vargas Llosa is a Senior Fellow and director of The Center on Global Prosperity at the Independent Institute. He is the author of Liberty for Latin America.

Robert Higgs is Senior Fellow in Political Economy at The Independent Institute, author of Against Leviathan and Crisis and Leviathan, and editor of the scholarly quarterly journal, The Independent Review. Click here for a bio on Dr. Higgs, the noted economist and historian.

Nicolas Heidorn is a public policy intern at The Independent Institute in Oakland, California.

For further information, see the Independent Institute’s book on wasteful farm programs, Agriculture and the State: Market Processes and Bureaucracy, by Ernest C. Pasour, Jr.

New from Ivan Eland!
THE EMPIRE HAS NO CLOTHES: U.S. Foreign Policy Exposed
Most Americans don’t think of their government as an empire, but in fact the United States has been steadily expanding its control of overseas territories since the turn of the twentieth century. In The Empire Has No Clothes, Ivan Eland, a leading expert on U.S. defense policy and national security, examines American military interventions around the world from the Spanish-American War to the invasion and occupation of Iraq. Buy It Today.

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