Original Abstract:
One of the key issues surrounding the financing, construction, operation
and management of a piece of infrastructure is what level of government
is accountable for its provision, management, or regulation. Both infrastructure
networks and government are typically hierarchically organized, though
the steepness of the hierarchy, the number of layers, varies. Management
by a government layer that is geographically too small or too large brings
about costs which can be avoided by associating the infrastructure with
the most appropriate layer of government.
In the North America, the hierarchy of roads emerged early in the 18th
Century with the division of roads into Great (or Kings) Highways and
Common Highways. Great Highways were under the authority of a colony’s
Governor and Council, while Common Highways were managed more locally
by appointed commissioners or the county court upon presentment of a grand
jury or petition. (Durrenberger 1931, p18). The history supports the general
observation of present conditions that links serving longer distance trips
are generally controlled by a higher jurisdiction than those serving more
local traffic.
Conventional traffic engineering suggests that streets and highways have
two distinct functions: through movement and land access (McShane and
Roess 1990, p 37). Highway facilities are classified by the relative amount
of movement and access they provide, though the share of each falls on
a continuum. The hierarchy of roads separates the function of access from
that of through movement. At the lowest level of the hierarchy are slow
low-flow roads that serve to permit individual buildings (homes, offices,
and stores) to access the networks. At the top level are fast high-flow
limited access roadways. The reasons for the hierarchy are several. First,
it permits the aggregation of traffic to achieve economies of scale in
construction and operation, a particular advantage in the construction
of expensive limited access facilities. Second, it reduces the number
of intersection conflicts. Third, it helps maintain the desired quiet
character of residential neighborhoods. An additional facet of the hierarchy
is that the excludability associated with higher levels and separability
associated with each layer create opportunities for efficient network
financing. In economic terms, the top level is potentially a competitive
market good, while the bottom level is a public or club good.
Just as the network is organized hierarchically, so are political jurisdictions.
In the United States, it is typical to find homeowners associations at
the lowest level, through towns and counties at middle levels, to states
and then the federal government at the highest level. Different layers
of government typically have different functions. A homeowners association
may regulate the aesthetics of the neighborhood and manage common property
and driveways, a local government may provide police, schools and some
roads, a state may provide another layer of law enforcement, universities,
and larger roads. The federal government provides for the national defense,
social insurance, and shares revenue between states - providing funding
for major transportation projects.
However, to date, there has been no systematic attempt to examine the
relationship between the hierarchy of roads, appropriate level of jurisdiction,
and means of financing. Two questions arise from these observations, which
must be addressed simultaneously.
First, what mechanism is appropriate to finance each different layer of
the hierarchy? In some cases, there is competition between links for the
same market. In others, a link acts as a monopoly, the only network path
between two locations requires the use of a single facility. We may infer
that some layers of the hierarchy are more suited to road pricing than
others. Further, different types of road pricing (cordon tolls vs. perfect
tolls) may be appropriate for different types of roads. Some layers of
the hierarchy may warrant subsidy from general tax revenue, while others
could be self-supporting with tolls. However, the pool from which this
tax revenue is drawn may vary (should it be state, county, township, or
neighborhood providing the subsidy), giving rise to the second question.
Second, which level of government should manage or regulate which level
of the network? There are a number of criteria for dividing the network
hierarchically, relating to network function, flow, speed, excludability,
competitiveness and alternatives, and locality of traffic. These criteria
influence the decision to associate network layers with government layers.
An essential issue surrounding hierarchy is the trade-off between span
of control and scale economies, including standardization of the finance
mechanism. Another is the trade-off between welfare loss associated with
lower government levels managing roads that serve in part non-local traffic.
Solutions for this problem include hybrid and decentralized organizations
and the use of oversight rather than direct management by higher levels
of the hierarchy. |
