Exploring Economic History

with Palgrave Macmillan

Analysing the Economics of Transport and Transportation Systems over Time

Björn Hasselgren, author of the forthcoming Transport Infrastructure in Time, Scope and Scale: An Economic History and Evolutionary Perspective, discusses the importance of analyzing transport infrastructure systems from an institutional perspective.  

Transport infrastructure systems are part of our everyday life to such a high extent that we often take them for granted. We travel to work or school, for business or pleasure. Goods are transported in different speed and geographies. The modern way of organizing our life, societies and economies has become more and more dependent on transportation, and transport infrastructure has become an important part of the economy in itself.

In a historic perspective transportation has always been an important aspect of human life. Exchange of goods and travel for different purposes; peaceful or in war, has driven the interest of moving people and things since ancient times. Successive innovations have led to an evolving transportation system with higher and higher speed, outreach and interconnectivity.

Transport infrastructure systems have in general been an inspiration to the development of economic theories. Much of the modern discussion on transport infrastructure, its organization, financing and use, grew from the time of the introduction of railways and modern road vehicles. In this book the primary focus is set on the time from the 1840s and up to our present time. Roads and railroads are the two transportation modes that are focused in the book. The reason for this is that these two transportation modes have been in focus of the public debate and the interest in academia over questions related to organization, financing and operations.

Roads and railroads have to a large extent been owned, financed and operated by governments, while maritime and air transportation related infrastructure assets have been owned to a higher extent by actors in the private sector and funded by user charges. A major question here is why it is that governments still do own, finance and operate roads and railroads, even if similar infrastructure systems in other areas of the economy have gradually been transferred to private sector organization.

The hypothesis behind the book is that this had to do with the persistence of economic theorizing and views “in the public domain” including politics, that government ownership and organization of roads and railroads is the “natural” thing. Privatization of these systems has often been seen as impossible or to be countering conventional wisdom or economic theory, no matter what the original basis for the argumentation was.

In order to understand and analyze the long-term development of a societal and economic system like transport infrastructure it is helpful to apply some theoretical and methodological framework to structure the multitude of data speaking about the time, scope and scale propensities of transportation and transport infrastructure. This framework in this book has to a large extent been institutional theory and a co-evolutionary perspective. Here different subsystems and factors in the economy are identified and used as a base for structuring data over time.

Co-evolution signifies a view on the development of the infrastructure systems where different factors and circumstances interact, sometimes to support a line of evolution, sometimes in competition. Institutional theory is here seen as a set of theories where, among other included interests, an organizational perspective is put to the fore. Here primarily on the level of the organizational units responsible for the management of transport infrastructure assets, such as government agencies or private sector corporations.

Discussing transport infrastructure policy and reality over time, two other dimensions are covered; planning vs. markets and coordination vs. spontaneity. These are themes that have been widely discussed in planning literature and in economics. Here a Hayekian Austrian perspective is contrasted against a more centralist neo-classical perspective. It is argued that this gives deepened understanding of the organizational challenges and outcomes in relation to transport infrastructure.

Björn Hasselgren is a guest researcher in the Economic History Department of Uppsala University, Sweden and has a PhD in planning and decision analysis from KTH Royal Institute of Technology, Sweden. His latest book, Transport Infrastructure in Time, Scope and Scale, discusses the economics of transport infrastructure, and economic theorizing around transport infrastructure, from 1850 to today.