This chapter describes how the change toward greater reliance on competition and less on economic regulation in transportation industries has created a special class of public policy problems associated with regulatory transitions. Chief among them was the transition from regulated private firms or state-owned enterprises to deregulated privately owned monopoly or competitive firms. While these "liberalization" developments are common around the world, the U.S. railroad industry provides useful examples, and has inspired many of the conceptual developments in identifying and solving the resulting problems. Of course, one of these lessons from these experiences is that every transition has its own idiosyncrasies that must be taken into account. Nevertheless, the experience of the U.S. rail industry can provide a guide to the types of problems, methods of analysis, and candidate solutions that are likely to emerge in any particular application to other methods of transportation and geographic circumstances. Different circumstances may require different policy responses.
Abstract