About two weeks ago, these pages featured an article titled “The liberalization fix to Delhi’s demonic traffic” by Barun Mitra, who heads a libertarian think tank in Delhi. Mitra essentially argues that Delhi’s “demand (for transportation) always exceeds capacity”, and that shortage of supply is due to a “misguided focus on the number of vehicles”, resulting in a policy that “seeks to restrict the entry of vehicles”. He suggests we remove all tariffs on licences, reduce petrol taxes and privatize the traffic police.
Most of us intuitively understand that Mitra’s free-for-all philosophy will only result in utter chaos, but the logic of supply and demand is difficult to counter. This is but the latest in a long tradition of libertarians attacking urban planning for disrupting market equilibrium, starting with Friedrich Hayek and Ludwig von Mises. But planners argue that theoretically, when we deviate from the ideal conditions of perfect competition, perfect information, and no externalities, markets fail to allocate resources efficiently. As a result, planners need to step in with regulation to prevent market failure.
The transportation sector has to deal with a lot of externalities. Each motor vehicle, merely by its presence on the road, consumes public expenditure in road construction and maintenance, delays other vehicles (including buses) behind it, makes walking/cycling less safe and pollutes the environment. People who would have taken buses or walked add to the traffic by using motor vehicles instead, and thus a vicious cycle is created. Regulating the number of vehicles through tariffs, petrol taxes and congestion taxes helps put a check on the deteriorating traffic situation and provide for pedestrians, cyclists and bus users.
So much for the theory. But let us also compare Mitra’s arguments with the realities of transportation in Delhi. Contrary to his assertion, the current ridership of the Delhi Metro is less than half the predicted ridership, i.e., demand does not exceed supply in all modes of transport. It must also be noted that Delhi, at 1,750km per sq. km, has the largest road density in India—comparable with cities such as Singapore, meaning there isn’t a problem with supply. If the roads are still congested, this proves that the number of personal vehicles swells with each attempt to increase supply. As Prof. Madhav Badami at McGill University notes, widening roads to deal with congestion is like loosening one’s belt to deal with obesity.
Mitra fails to see that transportation planning needs to manage both demand and supply, and it needs to incentivize public transport while disincentivizing private vehicles. Of course, not all liberalization is bad—the limits on the number of rickshaws in Delhi were arbitrary and counterproductive, and I welcome the Delhi high court judgement setting these aside. But far from vindicating the libertarian position, the judgement invokes the principle of equality and calls for congestion taxes to place cars and public transport on a more equal footing. Even municipal corporations are barred from taking on the state’s job of policing and confiscating vehicles: Mitra would have the job contracted out to private firms.
Mitra is right about one thing. India’s urban planners have consistently got it wrong, and this is partly because of the “triumph of hope over experience”. But he merely replaces the planner’s Utopia with the Utopia of the free market. His analysis is at complete variance with reality, and, therefore, he takes us no closer to a workable solution. We need to leave ideology behind and study how cities really work. Nor can we find solutions at the extremes of laissez-faire or total state ownership. Rather, solutions will have to be found in the messy in-between where markets and governments work together to improve the lives of Delhi’s residents.
Karthik Rao Cavale studies city and regional planning at Rutgers University, and focuses on planning history and transportation planning.
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