Model, process, technique, and the good thing

The word ‘entity’ is used to denote an administration; a state owned enterprise or corporation, or a multi-jurisdictional entity dealing with transport problems such as a metropolitan planning organization.

I am aware that there are other models of road administration evolution. One is the Cox model—birth, growth, upgrading, maturity. The Cox model is a road sector analogue of human development and unlikely to be useful for helping restructure road administrations.

The line between the phases is blurred, as is the line between puberty and young adulthood. Robinson (2003 and his other writings, especially 1998) has correctly observed that the exact content of the different phases depends on the initial conditions, administrative culture in the country, and even accidental factors.

Many public sector economists and multilateral financing institutions oppose ‘road funds’, the so called ‘second generation road funds’ notwithstanding (de Richecour and Heggie 1995). Although opposition to road funds has softened as a result of Heggie’s work, extra-budgetary funds are still viewed by most AGEs (Aid-Giver Entity) as poor governance and only a few “true” second generation funds are in operation. Nonetheless, a cost (or better, market) based income source, road user charges, is necessary for informed road management. No one argues that (part of) the railway tariff revenue should go to the treasury, and not to the railway company; but, that is exactly what opposing the ‘road fund’ implies. That some road user charges are collected in fuel price is immaterial. Admittedly, a better mechanism for collecting road user charges is desirable, and technically possible and inevitable, as I and others have indicated in several occasions.

I am aware of long term concessions, both of a facility and a network. That is different of privatization (=private ownership). The complex issue of long term concessions is not dealt with in this paper.

Aid-giver Entity’s (AGE) analyst team’s perspective often is to publicize its findings and the client’s shortcomings, and if they persist conclude that the advice given has not been followed.

The analyst team can be a consultant or an internally organized group to carry out the task. Both have their advantages and disadvantages. The consultant wants to “get the job done” and often neglects the client involvement. The client’s “self help” may avoid painful issues. In any case, there can be no success unless the client is genuinely involved. The reader is reminded that the same methodological approach applies to policy studies and planning; the reductionist approach may have merits to present complex material—but not to make policies or to help bring about “cure”.

Contact function is a term for a technique developed by Hyman Spotnitz (1985).

For example, a political decision in the EU requires vertical unbundling of the railways, which virtually ensures state ownership of railway infrastructure, and restricts exploration of other solutions. The follow-on EU decision to not open domestic rail passenger transport for competition as promised indicates shrewd political opportunism and inability to make credible commitments. Both France and Germany have little rail freight transport; their interest was to open freight markets in other countries and international passenger transport for competition for their companies, but not to open their passenger markets. The same thing apparently happened in the EU energy sector. Both decisions are illustrative of moving away from problems rather than examining them. The jointly defined planning process and travel demand forecasting model in the US is also an example of a resistance to reconceptualize a practice, however appropriate it may have been at an earlier time. It is a fair conclusion that, in the developed countries, modes of planning have become a resistance, which needs to be resolved for new concepts to become accepted. This is a serious ethical issue for scientists. There is emerging literature on transport planning techniques, which allow autoplastic and alloplastic change (Willson 2001; Willson et al. 2003; Talvitie 1997, 2006).

The Convention on Wetlands, signed in Ramsar, Iran, in 1971, is an intergovernmental treaty which provides the framework for national action and international cooperation for the conservation and wise use of wetlands and their resources.

The efficacy of well-timed emotional communications and lack of efficacy of too early interpretations of data are well-known (for example Spotnitz 1985, and other writings, and many papers by Freud). Also see McFadden’s (2006) comments and references to the efficacy of advertisements when “the affective content of the ad matches the mood of the consumer”.

The numerical example for Cases A and B was worked out by Dr. Colin Gannon (then of the World Bank) in response to my protesting a cost–benefit analysis in a country in which resource costs were used calculating the benefits and not the prices the users pay in the market for trips. Note that, in case of overpricing, a column for the generated traffic under the demand curve minus the corresponding cost must be added to the benefits. In many European countries the benefits of road investments are underestimated and rail investments overestimated, and income (benefit) transfers from road users to the economy are ignored.

A perceptive early reviewer of the paper commented: “…economists seldom, even over a beer, dispute the value of more discussion … among interested parties, nor do they dispute that these discussions can lead the participants to change their minds. Coase recognized that these communication activities are themselves costly … and therefore decision-makers will often choose a circumscribed decision-making process…. Time and resource constraints … could in fact serve as a negative way of defining an institutional structure… To say that economic analysis neglects to analyze consumer sovereignity is misleading. To say that a circumscribed economic analysis often chooses not to address preference formation would be more precise.” Intellectually this is true; however, without denying the value of freedom to choose, the issue remains in practice that the omnipresent application of neoclassical economic theory refuses to subject the exercise of consumer sovereignty and utility maximization to analysis, and whether this exercise, supported by intellectual and theoretical arguments, promotes or has a contagious effect on selfishness, and narcissistic and social disorders.

I have fastforwarded here. Holistic goals are also better in the early phases of development, but it may be necessary to subsidize roads in the early phases. This conjecture is based on my Finnish post-war experience. I am not aware of historical research on how much the road user charges financed early road network development in the developed countries.

Sirvio and Talvitie (2004) discuss these issues from other angles. In particular, legal and governance framework and regulations for such road authorities/corporations must be developed. There are many thorny issues to be resolved; the work should start along the lines suggested in that paper.

In an interesting paper Ieromonachou et al. (2006) discuss objectives of a publicly owned corporation in the road sector in Norway. Ieromonachou et al. paper is syntonic with concepts presented in this paper.

There is a risk, and a dangerous precedence in Railtrack, that regional road authorities would become regulated state-owned monopolies. The British case should be studied in detail. From a superficial examination it seems that the Rail Regulator was given, or assumed, rights that should have been exercised by a broadly constituted Board that would have reflected transport sector interests and not solely the railway interests.

There is curious inconsistency in some arguments for marginal cost pricing. While continuing to count benefits from the (road) user demand there is a concurrent claim that the revenue should not be used for building more facilities (roads) because the (road) users are creating the negative externalities in the first place.

Autoplastic change applies to both institutions and individuals. This idea dates back to Plato’s Republic (Wordsworth Edition 1997) where (young) individuals are affected by and internalize the culture of the polis and later (as adults) affect the culture of the polis by externalization of the internalized concepts and values. For an interesting discussion, see Jonathan Lear in Open Minded (1998), Chap. 10, Inside and outside the Republic.