Reforming the Natural Monopoly — the Case of Railroad Transport

Railroads have traditionally been a system-forming factor in any nation’s economy; they were structured as monopolies with strong vertical integration and were either owned or regulated by the state. The development of railroad networks at the end of the 19th and the beginning of the 20th century brought down transportation costs and led to the concentration of production. However, uprooting monopolies in limited local markets brought giant enterprises to life with potential monopolistic power at first in the national, and then in the international markets. Railroads themselves became centers of monopoly power as well (Golts G., Filina V.,1997 p.154).