likely lead to costly government failures.
IV. REGULATION OF TRUCKING IN THE U.S.
A. Is Trucking Prone to Market Failures?
The U.S. transportation system has long been regulated and subsidized by
various levels of government, 17 often justified by potential positive
externalities that transportation infrastructure exhibits. 18 As part of the
transportation system, it is possible that the trucking industry is prone to
positive externalities. Nonetheless, that argument is significantly weakened
because the trucking industry is a user of infrastructure, not a provider. Still,
the sheer mass of a large truck may pose a safety hazard to all other occupants
of the roads, a cost that is not obviously born by trucking companies in an
unregulated market. 19 Large trucks, therefore, may be the source of negative
externalities, allowing the possibility that regulations could improve
economic efficiency in the industry.
B. Are Trucking Regulations Well-Designed?
In assessing the state of trucking regulation, it is vital to keep in mind that
the question presented is whether the regulations are well-designed for
curbing the particular market failure that may exist in the industry. In the case
of the trucking industry, that means that the regulations must be judged
against the potential for: ( 1) positive externalities in the provision of trucking
services; and ( 2) negative externalities from increased risk to other drivers.
If the regulations cannot be justified on that basis, or if they go beyond that
narrow realm, then they are the likely culprits of the persistent trucker
17. Paul Stephen Dempsey, Transportation: A Legal History, 30 TRANSP. L.J. 235 (2003).
18. Roads, in particular are often thought of—to the extent the public thinks of such
things—as a public good. However, the definition of a public good is one that is both non-excludable and non-rival. ROBERT COOTER & THOMAS ULEN, LAW & ECONOMICS 46 (4th ed.,
2003). A good is non-excludable when you cannot keep others from enjoying the good once
it is being used by a single person. A good is non-rival when others’ use of the good does not
detract from the original consumer’s enjoyment of the good, and vice-versa. Roads, of course,
do not meet the strict definition of public goods, and private roads are quite common in the
world. However, because excluding others from a road is difficult and costly, a finished road
will bestow benefits on some drivers that are not able to be captured by the owner of the road.
That positive externality indicates that, absent some intervention, roads would be provided at
a sub-optimal level.
19. This conclusion is based, in part, on the previous justification for public subsidization
of public roads. A private road would almost certainly charge extra for large trucks for a
number of reasons: additional wear and tear on the road surface; additional risk of accident
and consequent reduction in traffic flows; etc.