Market failure exists when the competitive outcome of markets is not
efficient from the point of view of the economy as a whole. This is
usually because the benefits that the market confers on individuals or
firms carrying out a particular activity diverge from the benefits to
society as a whole.
Good transport links bring clear economic benefits, but the UK still
has a long way to go before its transport system is fit for purpose. As
the Labour party gathered in Manchester, political hot potatoes such as
High Speed 2, the proposed ‘northern corridor’ link between Manchester and Leeds and the problem of increasing airport capacity were under debate.
For Mary Creagh, shadow transport secretary, too little has been done
to create a transport system which puts the passenger first. She
bemoaned the tendancy of Whitehall clerks to think of transport as a
series of “modes”.
“I walk, cycle and get the tube to get to Westminster. This needs to
be looked at from the user’s perspective,” she said. For some of
Creagh’s constituents living on Wakefield’s estate, it’s cheaper for a
family to use a taxi together than to pay for the bus. “This is market
failure,” she said.
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Oligopoly - evaluating costs and benefits of collusion
