As public transit becomes more and more important to our economy, it is imperative that we understand which governing system achieves optimal efficiency. Following up on the work of Perry and Babitsky (1986), we quantitatively test whether certain forms of public governance are more efficient administrators of bus service. We utilize 2004 data from the National Transit Association database and control for federal funding, whether services are contracted out, region, population density, whether the system has a fixed guideway, the presence of local dedicated funding, and the ratio of local to federal funding. We find that special-purpose governments are more likely than general-purpose governments (cities and counties) to operate more efficiently. We also discovered that governments that contract out for some or all of their bus services are also more likely to be efficient than those public agencies that directly operate all of their services.
Leland, Suzanne & Smirnova, Olga.
Does Government Structure Matter? A Comparative Analysis of Urban Bus Transit Efficiency.
Journal of Public Transportation, 11 (1): 63-83.
Available at: http://scholarcommons.usf.edu/jpt/vol11/iss1/4