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C H A P T E R E I G H T E E N Urban Transport Policies: The Dutch Struggle with 18.1 INTRODUCTION Transport is characterized by various market failures that are of particular importance in urban settings. A basic market failure concerns environmental externalities, such as pollution and noise | A Companion to Urban Economics Edited by Richard J. Arnott Daniel P. McMillen Copyright 2006 by Blackwell Publishing Ltd CHAPTER EIGHTEEN Urban Transport Policies The Dutch Struggle with Market Failures and Policy Failures Piet Rietveld 18.1 Introduction Transport is characterized by various market failures that are of particular importance in urban settings. A basic market failure concerns environmental externalities such as pollution and noise that are of special relevance in densely populated areas. Traffic safety is also germane in this context. Other externalities relate to congestion on expressways leading into the cities and on the underlying urban transport networks. Regarding the supply of infrastructure cities have to deal with the public character of roads it is so difficult and costly to charge city road users for their use of roads that a private supplier would never supply them. Another failure is the criminality which affects travelers and transport companies and adds to the cost of urban transport as it calls for expensive preventive actions from the side of private and public actors. Still another example of market failure is that suppliers of transport services in monopolistic markets may supply poor and expensive services. Related failures occur due to lack of information on for example the availability of unoccupied parking places the supply of taxi services and public transport services. This failure leads to constrained efficiency. The Dutch Struggle with Market and Policy Failures 293 In the light of these examples it is inevitable that in many countries the public sector is heavily involved in urban transport policies. However it is well known that public-sector involvement to foster social welfare considerations may well have unintended side-effects of considerable magnitude. For instance the introduction of paid parking in cities to stimulate efficient use of parking places will probably lead to shorter parking durations more car movements
