Learning from the Swedes

Reader Rob Jackson calls attention to an article in today’s Wall Street Journal about the experiment in Stockholm, Sweden, with congestion pricing. It seems that the Swedes, for all their skill in urban planning and their investments in mass transit, are suffering from traffic congestion. Better yet, they’re adopting a market-driven remedy. Socialist though they may be, Sweden’s politicians apparently have a firmer grasp of economics than Virginia’s.

The Greater Stockholm region has nearly two million people. The central city, built upon an archipelago of islands linked by bridges, is particularly prone to congestion. Under contract with IBM, the national government has set up 23 tolling points which, used in conjunction with transponder boxes, laser detectors and cameras, tracks the path of every car in the city. Each time a car with a transponder passes through a toll, the charge is automatically deducted from the driver’s bank account. Tolls vary at different times of the day according to the level of congestion, ranging from the equivalent of $1.38 to $2.76 per hour.

The goal was to alter motorist behavior — and that’s exactly what has happened. Rather than drive to and from work at the same time every day, some Stockholmites (Stockholmers?) are varying their commuting times. Some are taking different routes. Some are riding bicycles. And many are availing themselves of mass transit. As the WSJ explains:

Before the trial began, Stockholm spent about $180 million on improvements to public transportation. It bought about 200 new buses and added rush-hour trains, express bus routes and more park-and-ride lots. But the changes had little impact on the number of people who left their private cars at home. In spring 2006, however, during the trial, use of all forms of public transportation jumped 6% and ridership on inner-city bus routes rose 9%, compared with a year earlier.

Now that the six-month trial has ended, the city has scheduled a referendum to let voters decide whether to make the congestion-pricing scheme permanent. A June poll found that 52 percent of voters favored the plan.

So far, the idea of congestion pricing in Virginia hasn’t gotten past the talking stage. It strikes me as remarkable that our transportation policies are more socialistic than Sweden’s.

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12 responses to “Learning from the Swedes”

  1. Anonymous Avatar

    Oh yeah — a system that tracks every car’s movements through transponders will go over with the public in Va. There remain people who won’t buy smarttag’s because they don’t want Big Brother to have the data (or their spouse’s divorce lawyer.) We won’t do photo red, and you are suggesting this?

  2. Jim Bacon Avatar
    Jim Bacon

    Anonymous, I don’t believe that the Swedish system requires people to install transponders. Some people will prefer that option because it’s more convenient.

  3. E M Risse Avatar
    E M Risse


    WaPo ran the Wall Street Journal story on D 5 of Business.

    Anonymous 11:06 see our comment yesterday re anonymity.

    Citizens can have functional transport, functional settlement patterns, functional governance and a sustainable civilization;

    Or they can, to protect cheating husbands and wives and others for whom secrecty is a way to preserve special privilage, obsess over private rights to the exclusion of public responsibilities.


  4. Ray Hyde Avatar

    By all accounts the Stockholm experiment has been a success, so far.

    Three issues come to mind. First, Stockholm spent $180 million on transportation improvements before the experiment. Would the experiment have been as successful if they had not spent the money? Was the “success” a manufactured result to cover up for the previously failed investment?

    Second, Stockholm had the presence of mind and the fairness of government to put this together as an experiment, and allow the citizens to dismantle it later if they thought it not worthwhile. That is an admirable approach, what US government has ever incorporated a policy as a test and THEN put it up for referendum? One of our problems is that having made a mistake, it is impossible to get the government to own up to it. Where is the referendum on whether we should spend umpteen billion on the Tyson’s project? Focus groups and special interests don’t count.

    Third, granted, the government in Stockholm has every incentive to spin this in a good light, and all the reviews seem good. I’m suspicious when no one seems to be able to find any shortcomings. In London, it took quite some time for the economic effects to sort themselves out and be measured. Although the London experiment also seems to be a success, there is considerable movement against it and the rapid rise in tolling charges that followed. It does not seem likely that it will be repeated in other English cities.

    For the record, I’m in favor of congestion tolling, but I also think it will hasten the de-emphasis of central areas. In London there seems to be a distinct decrease in business just inside the edge of the congestion zone and a distinct increase just outside. It is too soon to see what happens in Stockholm, but the situation in stockholm is a lot different from London.

  5. NoVA Scout Avatar
    NoVA Scout

    Singapore is another example of effective use of congestion pricing. I’m not usre that there’s much about Singapore’s governmental philosophy that we should emulate (thinly disguised one-party rule) but, as someone who has spent a great deal of time there over the past 20 years, I can testify that traffic in the center city is much improved without any indication that economic development has been curtailed.

    In Southern California, there are at least two tollways with variable pricing that fluctuates with traffic density. The highway design is configured to give drivers options about whether to pay the higher rates or get off the road. Seems to work.

  6. Larry Gross Avatar
    Larry Gross

    re: congestion pricing and “edge” impacts.

    simple – move the boundaries… 🙂

    further, let’s think outside the box here.

    what makes “congestion pricing” – WORK?

    It’s electronic tolling.

    “congestion pricing” is but one of dozens of possible outcomes based on the underlying technology.

    The privacy aspects are undeniable but the momentum towards electronic tolling is also.

    Right now.. they can “track” you with your cell phone and your credit card as well as red-light cameras and even security cameras in businesses.

    Electronic Tolling will make possible other methods of collecting revenue from vehicular travel besides congestion pricing.

    Obviously new roads/expanded/improved roads will also be possible – roads that we currently have no money for and unlikely to have money for in the near future.

    Electronic Tolls present an opportunity to build new roads shortly after the study/decision is made – vice waiting for years.. and in VDOT’s case decades.

    The primary difference between this country and other countries use of electronic tolling is that we’re still thinking of individual roads whereas those other countries are implementing electronic tolling for the REGION – as a way to SHAPE the entire network’s congestion.

    So.. think in terms of the entire NoVa area with a connecting network of electronically tolled roads being priced by the hour… and the place much like cell phone minutes.

    You have to admit – the cell phone business model does two things very, very well.

    First, you pay for when/where and don’t get a free ride and second, the cell companies collect enough in revenues to keep building more cell towers and expand coverage.

    think about the same model with roads and electronic tolling.

  7. Jim Bacon Avatar
    Jim Bacon

    Larry, the cell phone analogy is brilliant. That is the logic of where the technology will take us — if only politics don’t stand in the way.

  8. Ray Hyde Avatar

    Either Nova Scout is right or Larry is right.

    Congestion pricing doesn’t seem to have limited Singapores economic activity, but how would you know? For one thing, it’s like traffic congestion: the demand is so high that even if you build new roads or throttle the demand, it is still high. For another, If Larry is right and congestion pricing has shaped the region, then some of that economic activity is not happening where it might have otherwise.

    Transportation is very closey connected with economic activity. So in that sense, what tolling does is impose a tax on profits that have not yet been made. I think you should tax only income and sales, but I suppose you could rationalize this as a sales tax on use of the roads.

    I still think there is no reason to institute tolling except in special circumstances: Expensive bridges, and highly congested zones, for example. Otherwise a gas tax set high enough to do its job is still a fairer and cheaper method, and more environmentally friendly: the infrastructure is in place, and it automatically taxes by distance, weight, and horsepower.

  9. The cell phone analogy is far from brilliant. There are multiple cell phone companies (Verizon Wireless, Cingular, Sprint, TMobile, etc.). There is only one medieval and corrupt General Assembly. And their goal was, is and will remain the transfer of wealth from the economically successful (and congetsed) areas to those areas of the state locked in the economic practices of the mid 1800s. This will not end until the Dillon Rule is discarded in Virginia or Northern Virginia forms a separate state. Congestion “pricing” = congestion “taxation”.

    If you want to continue the cell phone analogy then Maryland ought to have a chance to propose their approach to traffic management using Northern Virginia’s taxes as a competitive alternative to the General Assembly’s proposal. The people of Northern Virginia (i.e. the buyers of the product offered under congestion “pricing”) would then have a choice – like they do today with cell phone service. Until there is choice, this is just another method of perpetuating the Northern Virginia subsidy of the southern Virginia welfare state. No thanks.

  10. Jim Bacon Avatar

    Groveton, You’re missing the point of Larry’s post regarding the cell phone model: “First, you pay for when/where and don’t get a free ride and second, the cell companies collect enough in revenues to keep building more cell towers and expand coverage.”

    How does the presence of absence of competition affect either of those two attributes?

    As for the “Medieval corrupt” General Assembly, don’t forget which region of the state sends more senators and delegates to that body than any other. As we’ve discussed elsewhere on this blog, the transfer of wealth between regions is accounted for primarily by the “Standards of Quality” funding formula that redistributes resources from affluent school systems to poor school systems, and secondarily by road-funding formulas that favor rural areas. Your criticisms should be directed to those two particular funding formulas, not to the “General Assembly” as a whole.

    Northern Virginia’s gripes over these funding formulas could be shared by the affluent suburbs of the Richmond area — but you don’t hear Richmond suburbanites fantasizing about seceding from the state. (For the record: I live in Henrico County.)

    Some Northern Virginians want it both ways. They’re entirely happy with the arrangement that divests it from any responsibility for the “inner city” of e Washington, D.C., and all those icky poor people, and they would like to divest itself from responsibility for outlying rural areas as well.

    In other words, these people advocate cherry picking the most affluent suburban jurisdictions of NoVa, creating a separate political entity for themselves and insulating themselves from the urban and rural poor.

    A gated community on a regional scale!

  11. Jim, isn’t that what congestion pricing does, place a toll gate on the community?

  12. Jim Bacon Avatar

    Ray, congestion pricing uses the pricing mechanism to allocate scarce roadway capacity. If you want to call that “placing a toll gate on the community,” I suppose you can.

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