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Spring 2015

ISSN 0890-913X

Volume 30, Number 1

Categories: Spring 2015 | Private Enterprises

Regulation As a Barrier to Market Provision and to Innovation: The Case of Toll Roads and Steam Carriages in England

Bruce L. Benson , Florida State University

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TheJournalofPrivateEnterprise30(1),2015,61–87RegulationAsaBarriertoMarketProvisionandtoInnovation:TheCaseofTollRoadsandSteamCarriagesinEnglandBruceL.BensonFloridaStateUniversity______________________________________________________AbstractTheturnpikesystemoftollroadsinEnglandpeakedaround1830,with1,116turnpiketrustsoperating22,000milesofroads.Itdeclinedthereafter;thelastturnpiketrustshutdownin1895.WilliamAlbert,authorofTheTurnpikeRoadSysteminEngland,1663–1840,contendsthatprivateenterprisedominatedtheturnpikesystem.SinceEnglishroadstodayarelargelypubliclyprovidedandtaxfinanced,theimplicationappearstobethatthemarketfailedtoprovidesufficientroadsandthegovernmentsteppedintoalleviatethe“publicgood”problem.Parliamentheavilyregulatedtheturnpikesystem,however,settingtollstobenefitorganizedspecialinterests,notallowingturnpiketruststopaytrusteesorretainprofits,andpreventingefficiency-enhancingmergers.Theturnpikesystem’sfailuredoesnotimplymarketfailure;excessiveregulationpreventeddevelopmentofaneffectiveprivateenterprisesystemofroads.Turnpikeregulationalsoreinforcedmonopolistic“marketfailure.”Whenentrepreneursattemptedtointroducesteamcarriagesseveraldecadesbeforetheadventoftheinternal-combustionautomobile,Parliamentimposedhightollsandaccesslimitationsinresponsetodemandsofrailroadsandhorse-drawntransportproviders.Steamcarriageswouldhavecompetedwithrailroadsifnotfortheseregulations.Asnewrouteswerebuilt,railroadsquicklyeliminatedhorse-drawncompetitionandenjoyedalongperiodwithlittlecompetitivethreat.Furthermore,severaldecadesofpotentialinnovationsinsteam-poweredroadtransportationeitherdidnotoccurorcouldnotbeimplementedinGreatBritain.__________________________________________________________JELCodes:H49,K29,L51,L98,N43,N73Keywords:tolls,turnpiketrusts,regulation,innovation,steamcarriagesI.IntroductionWilliamAlbert(1972,p.3),inhiswidelycitedandrecentlyreprintedbook,TheTurnpikeRoadSysteminEngland,1663–1840,states,“InEnglandthevarioustransportsectorsdevelopedgraduallyandwerecontrolledalmostentirelybyprivateenterprise.”SinceEnglishroadstodayarelargelypubliclyprovidedandfinanced61

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Title	Regulation As a Barrier to Market Provision and to Innovation: The Case of Toll Roads and Steam Carriages in England
Authors/Creators:	Bruce L. Benson , Florida State University
Year:	2015
Volume:	30
Number:	1
Pages:	61 - 87
Publisher:	The Association of Private Enterprise Education
ISSN:	0890-913X
Document Type:	Articles
Keywords:	tolls, tumpike, trusts, regulation, innovation, steam carriages

Citation:
Benson, Bruce L. / 2015. "Regulation As a Barrier to Market Provision and to Innovation: The Case of Toll Roads and Steam Carriages in England." The Journal of Private Enterprise, 30(1): 61-87.