Download file 157 KB Texto completo en español More of: Andrés Gómez-Lobo Andrés Velasco Guillermo Díaz

This article discusses various problems related to ground public transportation in Santiago. Although congestion and pollution are the problems most obvious to the public at large, traffic safety and economic inefficiency are equally important. According to the analysis presented in this paper, rents (profits above normal levels) and economic inefficiencies amount to US$ 65 million per year. But if rents and inefficiencies are eliminated, those resources could be used either to increase service quality or to lower ticket prices. Further liberalization, it is argued, will not solve the problems in the urban transportation sector. In light of an analysis of how the bus system works in Santiago, this paper describes some of the components that should form part of the reform. The Transantiago plan that will enter into effect in 2005 seems to aim, say the authors, in the right direction.