The reasons for the regulation of transport are explored. Government usually plays an important role, especially in the procurement of infrastructure. Historical reasons are seen as important factors for bureaucratic objections to deregulation. Fundamental economic concepts are forwarded that suggest market failure and justify a regulatory environment. This paper puts forward theoretical concepts from industrial organisation theory and from institutional economics which suggest that competition is even possible at the level of infrastructure. The transition from a storngly regulated to a competitive environment poses problems that have given rise to numerous failures in privatisation and deregulation. Structural inertia plays an important role, and the incentive-compatible management of infrastructure is seen as the key element of any liberal transportation policy. It requires that the setting of rules at the meta level satisfies both local and global efficiency ends. It is concluded that in market economies, competition and regulation should not be substitutes but complements. General rules, described as an 'ethic of competition' have to be set that guarantee a level playing field to agents. Institutions should provide arbitration in cases of misconduct. For the covering abstract for this conference see ITRD E128114.
Abstract