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University of Colorado at Boulder

Publication Date

Fall 2006

Program Name

Chile: Economic Development and Globalization


Throughout the years, as well as the world, transportation has always played a large role in the economic development of countries, cities and people. However, the idea of public transportation as a theme of study and investigation has only recently taken priority among the other problems facing developing nations. In the developed countries of the world, public transportation is viewed as a solution to the problems of congestion and contamination. However, the role it plays is reversed in countries such as Chile. In the capital city of Santiago where almost half of all daily journeys are made using some means of public transportation, the system is the problem. A few of the more serious issues facing Santiago as a result of its system of public transportation include environmental pollution, noise pollution, congestion in the streets leading to increased transit time, insecurity and fear as a result of an abnormally high level of accidents, and an overall low quality of service. The majority of these aforementioned problems can be traced to the failure of the transportation market. As an economic actor, transportation presents many difficulties to the State because of its market’s inability to function productively and efficiently as a result of imperfect information, ineffective competition, and the lack of economies of scale. The following study looks at these economic aspects of the market for public transportation within both a historical and present-day framework. It tries to use and reconcile two different means of evaluating the system, one from an economical approach and the other from the perspective of the consumers, in this case, the average user of public transportation. After a summary and analysis of different methods and projects for the future, like the Transantiago plan, the study concludes that because of the continually evolving nature of peoples’ transportation needs, an absolute solution to the problem of public transportation, which Transantiago appears to be, would not function in the city. Instead, Santiago needs more research, investment, and participation from all relevant actors: the users, the businesses, and the government. Only with this renewed dedication and commitment to public transportation can successful results be achieved and maintained.


Urban Studies and Planning



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