Once an icon of American industry, railroads fell into a long decline beginning around the turn of the twentieth century. Overburdened with regulation and often displaced by barge traffic on government-maintained waterways, trucking on interstate highways, and jet aviation, railroads measured their misfortune in lost market share, abandoned track, bankruptcies, and unemployment. Today, however, as Robert Gallamore and John Meyer demonstrate, rail transportation is reviving, rescued by new sources of traffic and advanced technology, as well as less onerous bureaucracy.

In 1970, Congress responded to the industry's plight by consolidating most passenger rail service nationwide into Amtrak. But private-sector freight service was left to succeed or fail on its own. The renaissance in freight traffic began in 1980 with the Staggers Rail Act, which allowed railroad companies to contract with customers for services and granted freedom to set most rates based on market supply and demand. Railroads found new business hauling low-sulfur coal and grain long distances in redesigned freight cars, while double-stacked container cars moved a growing volume of both international and domestic goods. Today, trains have smaller crews, operate over better track, and are longer and heavier than ever before.

Near the end of the twentieth century, after several difficult but important mergers, privately owned railroads increased their investments in safe, energy-efficient, environmentally friendly freight transportation. American Railroads tells a riveting story about how this crucial U.S. industry managed to turn itself around.

Megacities such as Santiago are becoming a worldwide phenomenon. In six of eleven South American countries, over 25 percent of the population lives in a single city. What policies should national governments adopt with regard to dominant metropolises? Is it appropriate to restrict the flow of population to big cities? Or should governments take a laissez-faire attitude and permit city growth?

Focusing on Chile, this book argues that appropriate government action lies between these extremes. The authors espouse spatial policies that mitigate the social costs of congestion and pollution but also ensure that migrants pay the social costs of moving to big cities.

Troubles in the transportation industries show the need for revising public policies and bringing them up to date. Neither regulatory nor managerial thinking has kept pace with technological changes that destroy many of the monopoly situations that once characterized transportation markets. The authors here assemble information concerning costs, market structures, and demand conditions for the rail, highway, pipeline, water, and air transportation industries. They take into account not only the cost of actual operations but related construction, capital, maintenance, retailing, and storage costs.

The approach is analytical rather than institutional or legalistic. In the view of the authors, the regulatory system should mainly, though not solely, seek to produce conditions ordinarily produced by competition, and should be maintained only as long as it will serve this purpose. The existing regulatory structure is often continued with no regard for its usefulness is a particular situation. Regulation has also been used as a means of perpetuating certain services that are unable to pay their costs but are considered socially desirable. In many cases, discontinuing uneconomic transportation services would unquestionably work undue hardships on innocent individuals. Yet continuance of these services under private enterprise requires higher charges on other transportation services. The question therefore arises of whether the harm done by these increased charges is greater than that which would result from abandoning the uneconomic services; the authors suspect that in a very large number of cases it is.

Insisting that transportation carriers continue to provide socially needed but uneconomic services imposes a standard that clearly conflicts with the cost minimization and efficiency criteria that are generally accepted as the proper managerial goals in a free enterprise economy. Even worse, regulation aimed at maintaining a given service often prevents the introduction of cheaper and better ways of performing certain transportation functions. The result is a net loss to both consumer and producer. The authors comment on the Motor Carrier Act of 1936, the Transportation Act of 1940 and the Weeks' Committee Report, and on the roles of the ICC and the CAB.

Transport in the former Soviet Union is experiencing massive changes in the 1990s: government responsibility has changed from operation to oversight; competition in the industry is increasing; and alternative financing and investment methods are emerging. Moving to Market examines rail, road, water, and air transport in the former Soviet Union and discusses the policy issues involved in making a transition from an industry once entrenched in a centrally planned economy to an industry that can thrive in a more open market. The authors conclude that the raw physical capacity is in place, but that quality of service and product needs to be improved. In addition, price structures need to be changed to reflect real costs and market demands.

The authors cite the "three M's"--marshaling, managing, and monitoring transport resources--as critical for the development of the nation's infrastructure as it moves toward the next century.