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Thursday, December 07, 2006

Britain's Infrastructure

Britain’s Infrastructure

The transportation systems in Britain have become overwhelmingly congested. The infrastructure is completely congested; the roads are literally packed bumper to bumper. Policy has put a halt on infrastructure growth, yet the need for improvements keeps getting more severe everyday. In 2000 a fuel tax idea was halted due to public protests. This was a mistake. The policy makers should understand the obvious need for infrastructure improvements. If roads and trains are thought of as a public good, then there is a free rider problem when it comes to who has to pay for them. That’s why the government has to take money from the people and provide the good anyways, even if they do protest. Roads and trains can also be thought of as club goods, or as excludable. If they were privately owned, as the rail roads once were, the people would have to pay for the amount demanded. Obviously the demand and supply of roads and trains in Britain are not even near an equilibrium point. Hopefully the government can provide the public good, if not maybe a private company can. Either way, the people are going to have to pay more to improve the infrastructure.

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