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69 sats \ 3 replies \ @Scoresby 21 Jun \ on: How Government Helps to Create Congested Traffic econ
Who will build the roads?
The people you pay to build roads
This sounds good. I want my road providers to be maximally responsive to the people who use the road.
I do wonder though about this case: there's a road like a main street. Company that built it was pretty good, but over time it gets worse (there's lots of crappy products in the world that don't quickly die). Customers are grumpy but road guy doesn't care. How is competition introduced? It's not like someone can build a second road right next to the first one. Instead, all the businesses on main street get screwed and maybe a new area of town with a better road operator becomes the main street.
Some infrastructure things seem to have physical limitations on their competition. Thoughts?
You're absolutely right that some roads will be of low quality and I have no intention of pretending privatization = perfection.
However, here are some reasons why outcomes might be better than the status quo (remember that bureaucrats have no/little skin in the game)
- The business owners could attempt to buyout the road owner and find a better management solution that suits their needs
- Alternative routes can be developed over, under, and around that main street, which will put economic pressure to at least only be as bad as its geographic premium allows
- Alternative modes of transportation may come to feed the area (i.e. pedestrian bridges, helipads, ziplines, use your imagination)
- Economic activity shifting to better maintained areas, would drive down profits and presumably make it easier to buy the owner out
- Finally, there's the high likelihood that those business owners will have entered into some form of service agreement with the road owner and can extract damages for breech of contract, potentially up to forfeiture of the road.
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These are pretty good responses. Making me wonder about the damage state-funded roads have done to our urban planning. Why can't I get to the coffee shop on a zipline? Sounds like a jest, but it's honestly a version of "Where's my flying car?" Why don't we have awesome pedestrian bridges and all the rest? Because largely we don't. And what kind of building have we not even considered because of this.
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I think about the damage (distortion) of heavily subsidizing roads a fair amount.
There was a study a long time ago that estimated the opportunity cost of streetside parking (in NY, iirc) was similar to the entire expense of their welfare programs. There really should be far less car traffic in dense urban environments. It's a wildly suboptimal use of space.
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