Regulation as a barrier to market provision and to innovation: the case of toll roads and steam carriages in England

The turnpike system of toll roads in England peaked around 1830, with 1,116 turnpike trusts operating 22,000 miles of roads. It declined thereafter; the last turnpike trust shut down in 1895. William Albert, author of The Turnpike Road System in England, 1663-1840, contends that private enterprise dominated the turnpike system. Since English roads today are largely publicly provided and tax financed, the implication appears to be that the market failed to provide sufficient roads and the government stepped in to alleviate the "public good" problem. Parliament heavily regulated the turnpike system, however, setting tolls to benefit organized special interests, not allowing turnpike trusts to pay trustees or retain profits, and preventing efficiency-enhancing mergers. The turnpike system's failure does not imply market failure; excessive regulation prevented development of an effective private enterprise system of roads.