Transport Policy: Fairness, Acceptance, Compliance and Leakage

Mobility is a highly regulated human activity, and the vast range of urban transport policies reflect conflicting beliefs about efficiency, fairness, acceptable social costs, and the limits of government control. The success of transport policies, whether innovative or replicated, can hinge on the compatibility of a policy with context-specific social goals. In our work on transport policy, JTL researchers attempt to make these normative foundations of transport policies explicit through comparative policy analysis and assess whether policies actually achieve these normative aspirations . One touchstone for this inquiry has been the car license quota schemes implemented in Chinese cities during the last decade, the variation among which represent remarkably different social and economic priorities.

Superficial Fairness of Transport Policies: Beijing’s Car License Lottery

“Fairness,” though commonly invoked as a guiding principle or evaluative metric in transportation policy, is an ambiguous concept. This paper aims to distinguish the conditions for three aspects of fairness: first, the distinctions between actual and perceived fairness and between substantive and procedural fairness; second, the differences among three norms of fairness: need, equality, and equity; and third, the evaluations according to different social categorizations. We illustrate the three aspects in Beijing’s car license lottery policy, both qualitatively through a review of policy documents and quantitatively via a survey of public perception. The policy sets up a yearly quota of new car licenses and distributes them by a lottery. The uniform distribution seems “fair” at first glance, but is only superficially so. The policy is substantively unfair under all common norms of fairness. It neglects the need and equity: its goal of uniform distribution abandons opportunities to favor disadvantaged groups or concern for entrants’ differentiated demands, and disregards necessities of corresponding fees. It intends to adopt the norm of equality, but fails to treat two social groups as equal to others: the policy largely excludes migrants and privileges prior car owners. However, based on the questionnaire survey (n=1505), we find that in sheer contrast to its actual unfairness, the public widely perceives Beijing’s car license lottery as fair, and comparing with Shanghai’s auction policy further reinforces this perception. We conclude that the fairness of the lottery policy is superficial in two senses: 1) substantively it offers a limited conception of equality-based fairness that excludes a large number of affected users; and 2) the fairness perceived by the public contrasts with the fairness established by the policy’s actual distributive outcomes. Takeaway for practice: Transportation planners should understand the multiple and often conflicting aspects of fairness, which require different policy instruments to achieve. Policy makers should pay attention to both perceived and actual fairness to improve people’s acceptance of transportation policies such as VMT taxes, toll roads or congestion charging.

Team: Jinhua Zhao and Shenhao Wang

Publication: Zhao, Jinhua, and Shenhao Wang. "Superficial Fairness of Transport Policies: Beijing’s Car License Lottery."

Bidding to Drive: Car License Auction Policy in Shanghai and Its Public Acceptance

Increased automobile ownership and use in China over the last two decades has increased energy consumption, worsened air pollution, and exacerbated congestion. However, the countrywide growth in car ownership conceals great variation among cities. For example, Shanghai and Beijing each had about 2 million motor vehicles in 2004, but by 2010, Beijing had 4.8 million motor vehicles whereas Shanghai had only 3.1 million. Among the factors contributing to this divergence is Shanghai’s vehicle control policy, which uses monthly license auctions to limit the number of new cars. The policy appears to be effective: in addition to dampening growth in car ownership, it generates annual revenues up to 5 billion CNY (800 million USD). But, despite these apparent successes, the degree to which the public accepts this policy is unknown. This study surveys 524 employees at nine Shanghai companies to investigate the policy acceptance of Shanghai’s license auction by the working population, and the factors that contribute to that acceptance: perceived policy effectiveness, affordability, equity concerns, and implementation. Respondents perceive the policy to be effective, but are moderately negative towards the policy nonetheless. However, they expect that others accept the policy more than they do. Respondents also hold consistently negative perceptions about the affordability of the license, the effects on equity, and the implementation process. Revenue usage is not seen as transparent, which is exacerbated by a perception that government vehicles enjoy advantages in obtaining a license, issues with the bidding process and technology, and difficulties in obtaining information about the auction policy. Nevertheless, respondents believe that license auctions and congestion charges are more effective and acceptable than parking charges and fuel taxes. To improve public acceptability of the policy, we make five recommendations: transparency in revenue usage; transparency in government vehicle licensing and use, categorising licenses by vehicle type, implementation and technology improvements to increase bidding convenience, and policies that restrict vehicle usage in congested locations.

Team: Tracy Chen and Jinhua Zhao

Publication: Chen, Tracy, and Jinhua Zhao. "Bidding to Drive: Car License Auction Policy in Shanghai and Its Public Acceptance." Transport Policy. 27. May 2013.

Normative and Image Motivations for Transportation Policy Compliance

A high level of non-compliance with policies aimed to protect common pool resources necessitates investigation into motivations behind compliance so that policies could be tailored to raise compliance level. Compliance with such protection policies of common pool resources such as car control policies instituted in Chinese cities aimed to reduce congestion and pollution is critical to ensuring sustainable development. In 1994 Shanghai instituted a monthly license plate auction policy to limit car growth, and it has led to some success in comparison to other cities. However, the high price of auctioned license plates—over $10,000 USD—has contributed to a significant degree of non-compliance (28% according to data collected for this research), which then compels investigation into the motivations behind compliance to improve the policy. The long-held instrumental theory emphasizing the dependence of compliance on tangible deterrence measures fails to adequately explain empirical findings. Recently established comprehensive models incorporate normative, instrumental, and image motivations behind compliance. Through a case study of Shanghai’s auction policy based on a survey (n = 1,389) of attitudes toward both the policy and compliance as well as actual behavior, this paper verifies the prime importance of normative and image motivations over the instrumental motivation to comply. Moreover, this paper establishes the significant positive relationship of local residency status (in the form of hukou) on both compliance itself and the various motivations behind compliance. The discovery of the importance of normative and image motivations to comply with transportation policy helps policymakers improve their approach to designing policies and regulations aimed to protect common pool resources.

Team: Jake Gao and Jinhua Zhao

Publication: Jingkang Gao and Jinhua Zhao (2016) Normative and Image Motivations for Transportation Policy Compliance. Transportation Research Board (TRB) Annual Conference. Washington, D.C., 

Purposeful Policy Leakage

Researchers, theorists, and officials commonly recognize instances of “policy leakage,” the gap between a stated rule and enactment of that rule. Causes for these discrepancies have been theorized and behaviorally observed. Existing schema, working from the perspective of subjects, acknowledge strategic and purposeful instances of non-compliance with stated rules. However, rule non-enforcement is overwhelmingly treated as a failure endemic to organizational arrangements, or an incapacity borne of coordination problems or prohibitive cost. These explanatory approaches are as-yet incomplete because they do not account for cases in which coordinated and purposeful non-enforcement occurs. Under certain conditions, the level of purposeful non-enforcement can strategically fall below the level of compliance, which we term “purposeful policy leakage.” In this paper, we describe a case of purposeful policy leakage: the Shanghai automotive license regime, in which violations of an auction-based allocative rule are strategically permitted by policy planners despite viable enforcement alternatives. We defend the reasonability of the strategy in this case, then consider generically the limitations of purposeful policy leakage against other governing strategies.

Team: Jinhua Zhao, Nick Allen, David Block-Schachter, Tracy Chen, and Andrew Lai

Project: Jinhua Zhao, Nick Allen, David Block-Schachter, Tracy Chen, and Andrew Lai (2015) Purposeful Policy Leakage