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How do new business models emerge? Neoinstitutionalists argue that the process often begins when a policy shift undermines the status quo; groups then vie to define the best alternative. The authors explore the role of power in selecting between two alternative business models available to railroads from 1897, when antitrust laws banned the cartel--the prevailing model for managing competition. Predatory railroads prescribed several methods for destroying rivals. Financiers prescribed amicable mergers instead, and fought predation by threatening to withhold capital from predators. An analysis of the 167 rail acquisitions in Massachusetts between 1825 and 1922 confirms that the financiers succeeded. After antitrust laws were enforced, railroads left cartels to follow the business model of financiers rather than that of predators. This can be seen in the conditional variables that predict buying and selling. Thus public policy and power can shape key market features. It is ironic that this market, built by antitrust, became the prototype for the neoliberal ideal of the unregulated economy.

The trend towards privatization and deregulation has affected railways in many countries where railway policy has become a major concern. While railways in the US and Japan have long been privatized and deregulated since the 1980s, it is only now that the issue has reached Europe. A notable example is in the UK where railways have been split into infrastructure and operations for privatization by the early part of 1997. In resolving public debates about policy, economic analysis can be of help in such areas as cost and productivity measurement and demand modelling.

The current state of Great Britain's rail transport reform by all indication leads to the country's objective of optimizing operation of its railways. These reforms come by way of separation of infrastructure from train operation, transfer of ownership, regulation, networks, open access, and performance regime. However, private train operating companies (TOCs) are struggling against high fixed costs and variable revenue. In addition, the passenger rail industry is still very much under government control. Hence, for government to completely achieve its reforms, it has to preserve TOCs, encourage rolling stock and infrastructure investment.

Proposals for open access in the rail industry were raised following the success of deregulation after the Staggers Act was introduced. Railroads have improved financially, thus eventually forgetting the previous damages caused by misguided regulations. Although major railroads still have not achieved the level of earnings that will deal with long-term costs of changing its current system, the yearning to reach that goal is one proof that deregulation is working.

The privatization of British Rail will lead to the eventual breakup of its pension fund. This, says the rail union RMT, has led to increased paper work and a new scheme which is more unfair to rail workers. According to Railways Pension Trustee Co. head David Adams, however, the new pension arrangements, which took one and a half years to iron out, still protect rail employees provided they do not voluntarily transfer to another company.

Around 37 parties have indicated interest in bidding for the first eight of 25 rail passenger services to be franchised out by the UK government under its privatization program for British Rail. The program entails the sale of about five freight companies, 13 infrastructure service companies and the flotation of Railtrack. However, a tight timetable and the complexity of the government's privatization strategy may put off investors.

This paper examines the impact of the Staggers Rail Act of 1980 on labor demand in Class-1 railroads during 1961-1990. The demand for labor is a function of output, hourly wages, a time trend, and a vector of interactive dummy variables. Since deregulation, the labor demand curve has shifted downward; wage elasticities have become more elastic, ranging from -0.668 in 1980 to -1.187 in 1990; output elasticities trended upward from 0.557 to 0.809; and the marginal product of labor rose from 3.421 to 5.296 during 1980-1990. These findings suggest that unions' bargaining power has declined, that the total wage bill is likely to decrease if the real wage rate rises further, and that cost savings and efficiency gains are realized through increases in the marginal product of labor. (Reprinted by permission of the publisher.)

Railway nationalization, the anvil on which national public enterprise was hammered together between 1917 and 1923, forms a misunderstood episode in the development of the Canadian state. This article examines the convergence of domestic politics and international economics that facilitated an unprecedented transformation of Canada's capacity to control its economy. State autonomy was used to create public enterprise as an instrument by which the gains of industrial restructuring could be distributed to favoured domestic financiers while its costs were imposed upon foreign investors. This power to manage the gains and losses arising from industrial change formed a new expression of economic sovereignty, one that ought to be viewed as an important step in the transition from imperial to national governance.

The effect of railroad industry deregulation on rail rates is examined. A model is designed to evaluate the impact of deregulation on rates for transporting 34 commodities. Results indicate that the effect of deregulation is governed by the type of commodity transported and time. Most commodity prices increased with deregulation initially but prices began dropping by 1988.

Regulatory reform in the US railroad industry is shown to have resuscitated the ailing transport sector. The reforms have provided railroads increased freedom to set rates, to offer contracts tailored to shippers' needs and to structure routes and services based on market conditions. As a result, rates of return on equity and investment for railroad firms have risen, transport rates have fallen and shipper service has generally improved. The industry also has stemmed the decline of its market share of the US transport market.

Congress deregulated the railroad industry so that railroads would become more competitive. This policy change poses two questions. Did deregulation increase competition? And if it did, were post-deregulation levels of competition sustained or did railroads learn to avoid competition as they gained experience with the newly deregulated transportation industry. Using market-share instability as a measure of the level of competition, several measures of structural determinants of competition, and pooled time-series regression, evidence was found that competition did increase after deregulation but that market-share instability also began to decrease, suggesting that railroads were learning to avoid competition in the new regulatory environment. (Reprinted by permission of the publisher.), The Staggers Rail Act of 1980 marked the end of an era in the economic regulation of railroad transportation. The goal of this policy change was to improve the performance [...]

The deregulation of the US railroad industry has allowed rail companies to change their alter their business practices. Freed from restrictive government control, leading rail carriers have chosen to rationalize their trackage and limit their operations to those that are most profitable. This has resulted in the abandonment of tracks, the sale of railway lines and the neglect of smaller rail customers. Many communities have responded to these problems by forming short lines. The preservation of local rail service is an issue that is relevant to the efforts of economic development professionals to attract, develop and retain business in their communities.