lable at ScienceDirect

Research in Transportation Economics 29 (2010) 319e322

Contents lists avai

Research in Transportation Economics

journal homepage: www.elsevier .com/locate /retrec

Workshop report e Public policy and transport

John Preston a,*, Kjell Jansson b

a Transportation Research Group, School of Civil Engineering and the Environment, University of Southampton, UKbDepartment of Transport and Economics, Royal Institute of Technology, Stockholm, Sweden

Keywords:CompetitionIntegrationRealist evaluationEconomic welfareAccessibilitySustainability

* Corresponding author.E-mail address: jpreston@soton.ac.uk (J. Preston).

0739-8859/$ e see front matter � 2010 Published bydoi:10.1016/j.retrec.2010.07.040

a b s t r a c t

This workshop considered the wider public policy goals of a range of transport interventions. Particularattention was paid to assessing the role of integration of the different components of the transportsystem and of the integration of transport with other economic sectors. This assessment was informed byRay Pawson’s realist evaluation approach, with its emphasis on the inter-relationships between context,process and outcome. The context was provided by case studies covering small urban areas, large urbanareas and inter-urban corridors. The three key processes identified related to a regulated system withpublic ownership and control, a deregulated system with private sector ownership (‘competition in themarket’) and a system in which there was public planning of the transport system but private provision(‘competition for the market’). Outcomes can be assessed using cost-benefit analysis tools to determineimpacts on economic welfare or more qualitative approaches can be used to determine the extent towhich accessibility or sustainability goals have been achieved. The evidence provided suggests that widerpublic policy goals are more important for urban than for inter-urban transport and it thus in urban areaswhere integration should be pursued with most vigour. The most relevant process for achieving thiswould seem to be variants of the competition for the market model. Some policy recommendations aremade and implications for further research and for future conferences assessed.

� 2010 Published by Elsevier Ltd.

1. Introduction

This workshop considered wider public policy issues related tothe development of land passenger transport networks. Somewhatsurprisingly this was the first time in the 20 year history of theConference series that this topic has been explicitly considered bya Workshop, although at Thredbo #9 in Lisbon there was a Work-shop on Policy Evolution and Decision Making Process (Bray &Smyth, 2007).

The rationale behind this workshop was that competitivemodels tend to consider public transport routes in isolation. Theyoften fail to consider the interactions between public transportroutes and modes. They also tend to ignore the inter-relationshipsbetween public and private transport, and they invariably fail toconsider the links between land passenger transport and othersectors of the economy. Policies based on competitive models mayhave benefits in terms of productive efficiency but may be lesssuccessful in delivering the public policy benefits associated with,

Elsevier Ltd.

for example, integrated networks and coordinated transport andland-use policies. This led us to the following questions:

� What are the wider public policy goals of land passenger transportand can competitive markets deliver them? This is a long standingbone of contention in the Thredbo conference series. On the onehand there is the neo-Austrian school that postulates thatexternal effects in land passenger transport are limited andGovernmental intervention will lead to inevitable, and oftendisastrous, regulatory failure (see, for example Hibbs, 2000).The neo-classical school highlights the dangers ofmarket failurethatwill arise fromunfettered competition in transportmarkets(see, for example, Gwilliam,1987). This has been a long standingtheme of the Conference series (as highlighted by Preston,2005).

� What are the benefits of integrated public transport and how canthey be achieved? It is often claimed that there are substantialbenefits from coordinating public transport services (to provideoptimal network coverage, frequency and fares). Jansson (1997)highlights the principal aspects and provides a numericalexample that shows that the addition of a route to a networkcan, in certain instances, reduce the overall level of service andalso the overall revenue. Thebenefits of coordination can also berelevant for providing the appropriate infrastructure facilities,

J. Preston, K. Jansson / Research in Transportation Economics 29 (2010) 319e322320

such as interchanges and park and ride sites (see for exampleNEA, OGM, & TSU, 2003). However although these benefits maybe estimatedwith recourse to theory (such as thework of Nash,1988), they are rarely quantified in practice, so it is difficult toknow whether they are material. If they are material, then it isimportant to consider the regulatory frameworks that mightdeliver them. It might be argued that neither free markets norclassic regulatedmarkets havehadmuch success in this respect.� What are the benefits of better linking land transport policieswith other Governmental policies and how may they be delivered?The benefits of integrating transport and land-use polices haveoften been viewed as axiomatic, but the evidence base on theextent of these benefits, and on practical case studies of howtheymay be delivered, is relatively limited. This is despite a longhistory of transit oriented development policies. Similarly, thereis relatively limited evidence on the interaction betweentransport and policies towards education, social services andhealth care. The evidence is particularly weak on the extent towhich delivery of these benefits is affected by the extent ofcompetition within the transport sector. Furthermore, the linksbetween transport markets and financial markets are importantin terms of funding, but again the extent towhich these links areaffected by the extent of competition has not often beenconsidered. A last issue is how transport users and the public atlarge might contribute towards better linking land transportpolicies with wider Governmental policies.

2. Workshop method

Theworkshopwas based on 10 source papers and presentations,listed below, and involved 16 participants from seven countries.Given the broad nature of the research questions posed above,a conceptual structure was adopted to inform discussions. This wasbased on a variant of Ray Pawson’s realist evaluation (Pawson &Tilley, 1997) and is illustrated by Fig. 1. It is sometimes referred toas the CPO model (Context-Process-Outcome), although theWorkshop felt it important to distinguish between actual anddesired outcomes. Appraisal examines the processes by which, exante, desired outcomes can be achieved. Evaluation focuses on theextent to which, ex post, desired outcomes have been achieved.

For this Workshop, the context was based on the ten presenta-tions that covered experiences from some eight nation states:Australia (Daban); Brazil (Silva et al.); Japan (Sanko, Takahashi,Yukawa); Norway (Jansson); Singapore (Jansson); Spain (López-Lambas); Sweden (Ljungberg, Jansson, Jansson) and the UK (Pres-ton, Jansson). These papers considered small urban (e.g. Linköping),large urban (e.g. Madrid) and inter-urban (e.g. Kobe e Osaka,Stockholm e Copenhagen) passenger transport. A range of trans-port interventions were considered, covering bus systems

Fig. 1. Workshop 6 conceptual structure.

(Ljungburg), urban rail (Daban), inter-urban rail (Sanko, K. Jansson),road pricing and parking (Jansson), cycling (Silva) and multimodalissues (López-Lambas, Takahashi, Yukawa).

Three broad processes were considered. The first, and arguablymost traditional, process was that of public planning and operation.The second process was that of competition for the market. Thisusually involves public planning and procurement from the privatesector: e.g. Competitive Tendering for operations, and Build-Oper-ate-Transfer (BOT) contracts for infrastructure. The third wascompetition in the market. This was based on commercial author-isations but could be enforced by subsidisation. For example,currently this might involve concessionary fare reimbursements. Inthe future this might be supplemented by mobility credits.

A number of other processes were considered by the Workshop.For example diversification in the form of the approval of land-usedevelopment in a negotiated contract, as has been used to developpublic transport in Japan (Yukawa) and elsewhere. In Brazil, area-specific public participation methods have been used to planbicycle networks with an emphasis on network integrity, direct-ness, attractiveness, safety/security and comfort (Silva). Another setof processes relate to the analytical approaches being used witha contrast between cost-benefit analysis approaches and othermore qualitative approaches.

Institutional integration was seen to be an important processand can involve informal (e.g., voluntary quality partnerships) andformal (e.g., statutory quality partnerships) structures, as wit-nessed in the UK (Preston). Integrationworks at a number of levels,including within the public transport sector, between public andprivate transport, between transport and transport-using sectorsand between economic, environmental and social objectives.

The workshop also noted the role of individual agency and therole of policy entrepreneurs, windows and communities, associatedwith the multiple streams framework developed by Kingdon(1984). Integration in the UK seems to have floundered on thelack of support from policy entrepreneurs and communities. Bycontrast, the development of the diversified private railways inJapan were often linked to forward looking individuals such asIchizo Kobayashi (Takahashi).

The chief danger of these processes, whether in public or privatecontrol or indeed involving some form of partnership, was seen asbeing monopolisation or cartelisation, often through some form ofregulatory capture.

In terms of desired outcomes, two overlapping viewpoints wereidentified. The first was that of the economists where the objectiveis to maximise economic welfare e the sum of producer surplus,consumer surplus, public accounts and externalities (providingtransfers are adequately identified). The second is that of publicadministrators where the emphasis tends to be on more qualitativegoals such as increasing accessibility and/or mobility and onpromoting of sustainability (economic, social and environmental).The workshop believed that a key requirement was adaptabili-tyethat is to have processes that can be adapted to changingcontexts whilst still delivering desired outcomes.

3. Case studies

Actual outcomes were provided by case studies sourced by theworkshop papers. Four examples are given herein.

In Linköping, the context was provided by a small Swedish townserved by bus (Ljungberg). The process involved the public sectorredesigning the bus network and staggering school hours (the keydeterminant for peak demand). Competitive tendering was used toprocure operations and investment in newer vehicles. The outcomewas an increase in economicwelfare, with a Benefit-Cost Ratio (BCR)greater than 1.7, whilst bus use was up more than 40%.However,

J. Preston, K. Jansson / Research in Transportation Economics 29 (2010) 319e322 321

a note of caution needs to be issued about the robustness of BCRmethods. In a case study of High Speed Rail in Sweden, it was shownthat one model (Sampers) gave a BCR of 1.2, whilst an alternatemodel (based on VIPS/RDT) gave a BCR of 1.8 (K. Jansson). The twovery different outcomes may though not be a failure of BCR in thiscase. One of the important reason for the different outcomes is thatthe Sampers model ignores combinations of modes and as a resultthe benefits in cases where travellers have to use another mode firstto reach the High Speed rail services.

In Gifu, the context was provided by a Japanese regional cityserved by bus and rail (Yukawa). The dominant process wasdiversification into land-use development, through a negotiatedcontract that involved direct subsidy from the local Chamber ofCommerce and/or cross subsidy from rail. The existing regulatorysystem acts as an important constraint on the extent that thedominant rail operator (JR) can diversify. The intended outcomewas to reverse decentralisation and automobilisation, althoughwith limited success to date.

In Madrid the context was provided by a large city with bus, railand metro (López-Lambas). The process involved multimodalinterchanges procured with a BOTcontract. Such contracts could beenforced by road user and parking charges (see also Jansson) andland value capture. The outcome in this case was increased PublicTransport usage and a Public Private Partnership that was perceivedas being successful, although this might be related to generousshadow prices.

In the Osaka-Kobe case study, the context was provided by aninter-urban corridor in a megalopolis (Sanko).The main processinvolved competition in the market between three routes forexpress rail services. Diversification into real estate developmentwas also an important feature, whilst the scope for yardstickcompetition (competition by emulation) was also noted. Theoutcome was a high rail mode share.

4. Conclusions

The wider public policy goals of public transport conventionallyinvolve economic development, social inclusion and environmental(and public health) goals. The case studies suggest that only inexceptional circumstances will these be met by competition in themarket (although Osaka-Kobe might be such an exception). Forurban public transport networks, there appear to be strong benefitsfrom integration, although quantification is often difficult, andsome form of public intervention in the planning process is usuallyrequired. However, the exact nature of this intervention, as illus-trated by our case studies will be context specific and may involveprivate sector participation.

The benefits of integrated transport are less apparent at theinter-urban scale, although this may because they can be intern-alised within one firm. There is though some evidence on the widereconomic benefits of high quality inter-urban transport, asprovided by high speed rail for example.

Particular benefits may arise from the integrated use of policyinstruments. For instance, the scope to which parking policy maysupport (or substitute) congestion pricing has been given insuffi-cient attention, as has how the two interact with public transportmarkets (Jansson). An issue that also arose in this context is pathdependency. London and Stockholm have both invested in highlevels of enforcement for their road pricing schemes and this mayhave resulted in a degree of technological lock-in.

There may also be substantial benefits of integrating transportpolicy with other governmental policies, for example concerninghealth care, education, and social services. However, such joined-up government is often difficult to achieve, whilst the benefits, orindeed, the costs have rarely been quantified. For example,

staggered school hours would save on transport costs but may havesubstantial social costs in terms of the disruption to householdactivity schedules. There are similar challenges in terms of quan-tifying the benefits of transit oriented development in terms ofliveability and community diversity (Daban).

It is the view of the workshop that many of these issues could beinvestigated by forms of the context-process-outcome approachoutlined above. We would particularly emphasise the need forevaluation studies to examine how actual outcomes have matcheddesired outcomes and the extent to which the achievement ofdesired outcomes is shaped by context and process.

5. Policy recommendations

There is sufficient evidence to suggest that wider public policygoals are important and they should be taken into account whenmaking decisions. It seems likely that past decisions with respect tocompetition and ownership in land passenger transport may haveneglected these wider goals and as a result, in certain cases, inap-propriate decisions may have been made.

It also seems likely that competition in the market approacheswill neglect these wider policy goals. By contrast, classic regulationwith public ownership and control of transport can ostensiblydeliver the wider public policy goals but in practice this is usuallymitigated by high costs and low productivity, exacerbated bypolitical interference and tendencies towards ossification. Compe-tition for the market models offer the prospects of delivering bothwider public policy goals and cost efficiency. However, there area number of policy issues that should be considered:

(i) Traditional tendering and franchising models have tended toadopt a top-down planning approach. Policies that promotemore participative, localised bottom-up planning should beencouraged.

(ii) Competition for the market models have tended to involvea separation of public planning from private operations. Thereis competition for operations but rarely is this extended to theplanning function, even though this has been posited for sometime as a possibility, not least by this Conference series(Preston, 2007). Such competition would prevent planningfrom being overly bureaucratic.

(iii) Public private partnerships have been widely used for capitalinvestments in transport infrastructure but they have beenrarely used with respect to recurrent expenditure on transportoperations.Policies that permit private operators to feed intothe planning process need to be found.

Most policies to deliver wider public policy goals have concen-trated on supply side interventions such as investment in transportinfrastructure or the subsidisation of transport services. In futurethere may be more consideration of user side interventions. Forexample, given the likely impacts of peak oil and climate change, itmay be that in the longer term a system of personalised carboncredits will be required and transport, as the main consumer of oilin most countries, is most likely to be affected. In the interim, withthe development of smartcards relatively blunt policy instruments,such as universal concessionary fares schemes, could be convertedinto more targeted mobility vouchers.

Given the greater importance of wider economic, social andenvironmental goals for urban compared to inter-urban transport,commercial authorisations may be more appropriate for inter-urban transport. Competition in the market could be encouraged,but in the expectation that only small group competition willemerge. As a result regulation will be needed to preserve networkbenefits and to ensure prices and outputs do not drift too far from

J. Preston, K. Jansson / Research in Transportation Economics 29 (2010) 319e322322

perfectly competitive benchmarks. Yardstick competition may helpdetermine such benchmarks. Permissive policies might be adoptedtowards diversification into complementary economic activities.

There may be substantial benefits of institutional integration.For small urban areas such integration can be developed based onpersonal relationships. Elsewhere more formal arrangements willbe required. This will include planning laws to integrate transportand land-use, mechanisms to encourage cross departmentalagencies and joint committees and new structures, such as theIntegrated Transport Authorities in England.

6. Research recommendations

An evidence base is emerging on the impacts of transportinterventions on wider policy goals and on the benefits of inte-gration within the transport system and between transport andrelated economic sectors. However, this evidence base remainslimited and dominated by certain countries (e.g. the UK) and thereis a need to bring together more case studies that will give trulyglobal coverage. The challenge will then be to generalise these casestudy results. One possible approach would be to use principalcomponent analysis (and related techniques) to classify urbantransport markets. There may be scope for meta-analysis andrelated techniques to determine key influences. The developmentof a more comprehensive evidence base might permit examinationof critical mass e the threshold at which certain transport policies(such as cycling or rail provision) become appropriate.

This evidence base is currently dominated by cost-benefit anal-ysis approaches. Future research might focus on alternative tech-niques such as multi-criteria analysis or goal achievement matrices.Accessibility and/or sustainability indicators might be developed toreplace or complement economic efficiency measures.

There has been a tradition in transport to undertake partialanalyses. Concernwith wider policy issues points in the direction ofmore general approaches such as the use of systems dynamicapproaches or computable generalised equilibrium models. Suchapproaches might help identify perverse incentives, reboundeffects and other interactions that lead to potential unintendedpolicy consequences. It also suggests that the network, rather thanthe route, should be the key unit of analysis. With complexnetworks, modelling of route choice becomes a challenge, partic-ularly for public transport, whilst improved understandings ofdestination choices are also needed.

In considering wider public policy goals, there is perhaps anunderstandable tendency to focus on structures. The role of indi-vidual agency, both in terms of the top-down leadership of largeorganisations and the bottom-up role of community groups andactivists, is worthy of further study.

7. Recommendations for Thredbo 12

Thredbo 11 was the first time that the wider public policyimpacts of transport were explicitly considered in a workshop.Given the need identified above to develop the evidence base, werecommend that a similar workshop be convened at Thredbo 12.Given the location of Thredbo 12, the evidence base might beparticularly enhanced with respect to developing countries and therole of third sector organisations and of paratransit. We suggest

that a realist evaluation approach should be adopted in theconstruction of the evidence base.

Although we believe that wider public policy impacts are moreimportant for urban than inter-urban transport, high speed rail isbeing promoted in the UK and the US on the basis that it provideswider economic benefits. Such assertions might be usefullyreviewed at an international scale.

Given our assertion that the network is the fundamental unit ofanalysis, more evidence on the role of network benefits andeconomies would be particularly useful. Similarly given our argu-ments for general rather than partial analysis, consideration shouldbe made of more holistic approaches to modelling, appraisal andpolicy implementation.

Lastly, given our view that agency has been somewhat neglectedat the expense of structures, we recommend that transport policiesbe reviewed with respect to political science models such as thoseoutlined in Bray and Smyth (2007). It may well be that it is politicsrather than economics that ultimately determines the extent towhich transport delivers wider public policy goals.

References

Bray, D., & Smyth, A. (2007). Workshop F: policy evolution and decision makingprocess. Selected Papers from the 9th International Conference (Thredbo 9),Lisbon, September 2005. In R. Macario, J. Viegas, & D. A. Hensher (Eds.),Competition and ownership in land passenger transport (pp. 831e844). Oxford:Elsevier.

Gwilliam, K. (1987). Market failure, subsidy and welfare maximisation. In S. Glaister(Ed.), Transport subsidy (pp. 6e25). Newbury: Policy Journals.

Hibbs, J. (2000). Transport policy: The myth of integrated planning. London: Instituteof Economic Affairs.

Jansson, K. (1997). Welfare aspects on organisation of public transport. InternationalJournal of Transport Economics, 24, 1.

Kingdon, J. (1984). Agendas, alternatives, and public policies. Boston: Little, Brown.Nash, C. A. (1988). Integration of public transport: an assessment. In

J. Dodgson, & N. Topham (Eds.), Bus deregulation and privatisation. Alder-shot: Gower.

NEA, OGM and TSU. (2003). Integration and regulatory structures in public transport.Final report. Brussels: DGTREN.

Pawson, R., & Tilley, N. (1997). Realistic evaluation. London: Sage.Preston, J. (2005). The road to Rio: a brief history of the international conferences

on competition and ownership in land passenger transport. Selected papersfrom the 8th International Conference (Thredbo 8), Rio de Janeiro, September2003. In D. A. Hensher (Ed.), Competition & ownership in land passenger trans-port. Oxford: Elsevier.

Preston, J. (2007). Contracting-out public transport planning: prospects andoptions. Selected papers from the 9th International Conference (Thredbo 9). InR. Macario (Ed.), Competition and ownership in land passenger transport. Oxford:Elsevier.

Workshop presentations

Daban, G. A., Successful TOD Will Reinforce Both the Community and the TransitSystem.

Jansson, J. O., Road Pricing and Parking Policy.Jansson, K., Models for Competition between Public Transport Routes and Modes.Ljungberg, A., Local Public Transport On The Basis Of Social Economic Criteria.López-Lambas, M. E., Private Funding and Management for Public Interchanges

in Madrid.Preston, J., What’s So Funny About Peace, Love and Integration?Sanko, N., Analysis on the Structural Characteristics of the Station Catchment Area

in Japan.Silva, S., Area Specific Bicycle Planning. (Presented by Rob Hulleman).Takahashi, Y., Public Transport for Shopping: An Analysis on the Interaction

between Intrinsic and Derived Demand.Yukawa, S., Suburbanization and Urban Public transport, Declining Public Transport

in Japanese. Regional City and Regional Transport Policy.