Foundational Factors and Policy Levers

Governance

The governance of transportation directly affects the extent to which it serves or hinders societal goals. The definition of “governance” varies across contexts. The concern expressed in this publication regards overlapping and sometimes competing authorities in making decisions about investments, operations, and regulation of transportation. The fragmented system of governance across public and private sectors and levels of government makes it difficult for the U.S. transportation system to function as a whole. For example, passenger and intermodal freight transfers are not as seamless as they are in many western European countries. Instead, the United States has independent systems that do not always coordinate, as some are fully private (railroads, pipelines), some fully public (transit), and some a hybrid of both (public infrastructure and private carriage in highway, air, and water transportation). The United States also has multiple levels of government that regulate safety, fuels, and vehicle emissions and that fund and make decisions about transportation infrastructure that affect mode choice, system performance, and equity. Despite the many authorities involved in governance, and perhaps because of it, they lacked the scope, authority, or expertise to intervene or assist the private sector when supply chains were severely disrupted during the COVID-19 pandemic, which may have contributed to the spike in inflation that occurred as the pandemic subsided.

The recent U.S. focus on achieving climate goals has added a new international dimension to transportation governance. The Paris treaty discussed in the Climate Change section above gives nations flexibility in how they achieve their domestic carbon reduction goals, but international shipping and aviation GHG emissions standards are set in other international fora under the auspices of the United Nations. Whatever international GHG emissions standards these bodies set for shipping and aviation will greatly influence what can be achieved domestically. International influences on setting domestic climate goals, of course, adds to long-standing international agreements on trade, which have had profound effects on demand and public and private investments in domestic transportation vehicles and infrastructure.

Funding and regulatory policies at the federal level affect what private carriers, states, and local governments must, can, and cannot accomplish. Federal highway funding has become increasingly flexible over time, allowing for investments in transit and active modes of transportation using funds raised mostly from highway vehicle users. However, federal performance requirements can constrain states’ ability to pursue their

own objectives. As described in the following section on land use, metropolitan governance is divided among multiple and sometimes hundreds of jurisdictions.¹⁵⁶ Suburban and exurban decisions about land use and transportation may not align with the development goals and infrastructure plans of center cities. In turn, the goals and objectives of center cities may not align with those of state governments. Some large metropolitan areas even struggle to coordinate the multiple transit systems operating within them.¹⁵⁷

Despite these complexities, U.S. freight transportation appears reasonably efficient, as described in the section on transportation’s role in the economy. Sometimes states and regions work together with federal agencies to achieve common goals for passenger transportation. Although they required decades of effort and failed to fully satisfy all parties, recent examples include funding agreements for the replacement of the Baltimore and Potomac rail tunnel in Baltimore, Maryland, and new and reconstructed passenger rail tunnels connecting the Northeast rail corridor with New York City. Greater coordination between the public and private sectors is also furthering achievement of societal goals. Innovations in EV batteries and IRA and IIJA funding have aligned automakers, their suppliers, and public officials on achieving climate goals through vehicle electrification. Greater collaboration is also occurring between the public and private sectors to enhance safety. Most notable is the Commercial Aviation Safety Team—a public–private collaboration that is intensely focused on preventing aviation accidents and implementing measures beyond what safety regulations require.¹⁵⁸ However, transportation officials at all levels express concern about working at cross purposes with other levels of government, other agencies, and private carriers in pursuit of development, safety, equity, and environmental goals. The dismay of city and county officials over a California Public Utilities Commission ruling in August 2023 to allow 24-hour operation of self-driving cars on the local streets of San Francisco and San Mateo County is but one example.¹⁵⁹

The complexities of governing transportation across international, national, state, and local levels—as well as interactions with private-sector providers—are real enough to the practitioners engaged in them. With rare exceptions, however, the ways divided governance impedes achievement of societal goals at different levels of government are largely invisible to the public and are not the subject of studies and analysis in search of implementable best practices.