‘Regulated deregulation’ of local bus services—An appraisal of international developments

Document Type

Journal Article

Publication Date


Subject Area

mode - bus, place - australasia, place - europe, organisation - competition, organisation - contracting


Deregulation, Local buses, Great Britain, New Zealand, Sweden


The deregulation of the British bus sector (outside London) in 1986 was the start of a debate on the merits of ‘deregulation’ and ‘competitive tendering’. The period that followed was rich in lessons. New Zealand was at the time the only other country engaging in a reform based upon market initiative (implemented in 1991). Other countries chose for a less extreme and more consensual way to introduce competitive incentives, choosing the fundamentally different competitive tendering (CT) path. As a result, the so-called ‘Scandinavian model’ developed, based upon the London example of route tendering. Later the Netherlands adopted a network tendering approach, resembling the French practice of network tendering though with more operator freedom.

This paper focuses on recent experiences (outside developing countries) with market-initiated competition, as opposed to authority-initiated competition through competitive tendering. The paper covers the experiences of Great Britain and New Zealand, and the opposite example of Sweden were a partial deregulation will soon be implemented as a result of disappointment with earlier results of CT. It describes the expectations that came with their introduction, and some of their perceived shortcomings, and analyses the legal changes enacted to cope with revealed shortcomings. By doing so, the paper describes, compares and draws a few conclusions on the institutional evolutions that can be observed.


Permission to publish the abstract has been given by Elsevier, copyright remains with them.


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