Monday, October 8, 2012

Free highways lead to gridlock in China

The idea of pricing road usage is still controversial in this country. Although it would likely save everyone some time and headaches from congestion (and time is money for most folks), people resist paying for access they feel entitled to be given for free.

This year, China recently decided to celebrate a week of holidays by making all roads free for travel. The result was epic gridlock.
Long tailbacks were reported across the country, with 24 major motorways in 16 provinces effectively transformed into enormous parking lots as 86 million people took to the roads, a 13 per cent increase on last year.
Not everyone was surprised:
Li Daokui, one of China's most prominent economists and a policy adviser to the Central Bank, said the snarl-up was entirely predictable. 
"[Making the] Highways toll free on holidays? We are making a world record of stupidity by launching this policy […] Going free of charge is like shouting out to the public: '1,2,3, let's go jam the road!'" he posted on his Weibo.
I'm sure though that, as an economist, he may have some small appreciation of the mess as an unintentional experiment. I think that this decision by the Chinese government, regarding their toll roads, does a good job of making the case for road pricing: by demonstrating that the opposite causes chaos and unbelievably high levels of congestion.

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