Internalizing the Externalized: The Case of Roads

My most recent post at‘s blog Interchange has stirred a really interesting discussion on road finance and externalities. I believe the quality of the discussion is among the highest in my three years of posting on the blog. My main point was the following:

So, are road users externalizing their costs? Road investments have historically predated the widespread use of the automobile and modern-day urbanization in concept if not scale. The grid street pattern pre-dated the automobile as well as the system of roads knitting rural villages and towns to urban areas.

I don’t believe road users externalized the costs of roads as much as governments recognized their social benefits (for commercial purposes as well as passengers) and the practical inability of the private sector to provide those facilities and services. As a consequence, governments dedicated funds to building what was considered social infrastructure that served rural and urban purposes.

Now, the rationale for non-user based public expenditures on roads and highways is weakening, and weaker by the decade with each new spurt in technology. While we can expect intense lobbying by current users to retain the subsidies they have, that’s not the same as arguing that the reason we subsidize public infrastructure is because of special-interest lobbying for a redistribution of funds away from non-users to support their own narrow projects. The more productive discussion, I believe, is over whether the rationale for public funding of roads exists any longer and how to phase it out.

But, the discussion has been wide ranging and thought provoking, ranging from road finance, to land use, to European urban history. Of course, I don’t come through unscathed, but this exchange I believe has moved an interesting debate within the planning profession forward.

Samuel R. Staley, Ph.D. is a senior research fellow at Reason Foundation and managing director of the DeVoe L. Moore Center at Florida State University in Tallahassee where he teaches graduate and undergraduate courses in urban planning, regulation, and urban economics. Prior to joining Florida State, Staley was director of urban growth and land-use policy for Reason Foundation where he helped establish its urban policy program in 1997.

Staley is the author of several books, most recently co-authoring Mobility First: A New Vision for Transportation in a Globally Competitive 21st Century (Rowman & Littlefield, 2008). Texas Gov. Rick Perry aid Staley and Moore "get it right" and world bank urban planner Alain Bartaud called it "a must read for urban managers of large cities in the United States and around the world."

He is also co-author, with Ted Balaker, of The Road More Traveled: Why The Congestion Crisis Matters More Than You Think, and What We Can Do About It (Rowman and Littlefield, September, 2006). Author Joel Kotkin said, "The Road More Traveled should be required reading not only for planners and their students, but anyone who loves cities and wants them to thrive as real places, not merely as museums, in the 21st Century." Former U.S. Secretary of Transportation Mary Peters said, "Balaker and Staley clearly debunk the myth that there is nothing we can do about congestion."

Staley's previous book, Smarter Growth: Market-based Strategies for Land-use Planning in the 21st Century (Greenwood Press, 2001), was called the "most thorough challenge yet to regional land-use plans" by Planning magazine.

In addition to these books, he is the author of Drug Policy and the Decline of American Cities (Transaction Publishers, 1992) and Planning Rules and Urban Economic Performance: The Case of Hong Kong (Chinese University Press, 1994).

His more than 100 professional articles, studies, and reports have appeared in publications such as The Wall Street Journal, The New York Times, Washington Post, Los Angeles Times, Investor's Business Daily, Journal of the American Planning Association, Planning magazine, Reason magazine, National Review and many others.

Staley's approach to urban development, transportation and public policy blends more than 20 years of experience as an economic development consultant, academic researcher, urban policy analyst, and community leader.

Staley is a former chair for his local planning board in his hometown of Bellbrook, Ohio. He is also a former member of its Board of Zoning Appeals and Property Review Commission, vice chair of his local park district's open space master plan committee, and chair of its Charter Review Commission.

Staley received his B.A. in Economics and Public Policy from Colby College, M.S. in Social and Applied Economics from Wright State University, and Ph.D. in Public Administration, with concentrations in urban planning and public finance from Ohio State University.