How to Privatize the Roads

The Mechanisms and Benefits of Road Privatization

In "The Necessity of Road Privatization," I argued that private ownership of the roads would lead to far greater economic efficiency, customer convenience, and road durability than control of the roads by governments, which often have perverse incentives to specifically commission poor-quality roads in need of constant repair, as a means of favoring select constituencies among politically-connected road construction firms.

Now the question arises: "Given that road privatization is desirable, how could it be done, and how would private roads work?" This essay offers constructive suggestions as to how the transition from government or "public" ownership of the roads to a private, competitive, free-market system can be made. Furthermore, it presents ways in which private road entrepreneurs could innovatively manage their property so as to maximize both profit and customer convenience.

Creating a vast, efficient private network of roads quickly is easier in the status quo than it would have been in a state of nature. The advantage of the present situation is the presence of an immense number of roads currently owned by local, state, or federal governments. Converted to private hands, these roads could almost immediately be managed with far superior results than the current state of things brings about. Even if no new roads are built, privatizing the existing ones would greatly increase the quality of transportation and dramatically reduce the amount of road maintenance and traffic delays, which at presently grievously hinder the economic life in virtually all developed countries.