This chapter describes how, during the last two decades, deregulation, liberalization and privatization have had tremendous impacts on the organization, conduct, and performance of the various transport sectors. This is clearly visible, for example, the European Union (EU), where measures continue to be developed in order to foster freer market access to modes of transport and a more effective competition both within and between modes. Except for infrastructure planning and investment, coordination has largely disappeared from the list of major concerns for regulation in the transport industries, i.e. the argument of cut-throat competition is almost dead, and the market mechanism is trusted as a coordinating device. The main exception of data is public transport, which is still mostly coordinated by planning and regulation. Central planning with competitive tendering is a recent addition, and is a modern competition-based instrument of coordination for public transport. Integral competitive tendering of transport services ("franchising") by transport authorities replaces the free market, and abolishes autonomous market entry and behavior. It should therefore not be confused with coordination by the market. Full deregulation, as introduced in the UK bus sector outside of London in 1986, is the main alternative and only large-scale example in western Europe of coordination by the market in public transport. Because this example clearly has some shortcoming, further studies are required in order to judge its true merits compared with traditional coordinated regimes, with or without competitive tendering.
Abstract