One Easy Way to Make Public Bus Service Cheaper and Greener

America's public bus service would be cheaper, greener, and better if federal rules didn't prevent cities from sourcing buses internationally. That's the finding from a recent working paper by economists Shanjun Li, Matthew Kahn, and Jerry Nickelsburg.

In the United States, public bus procurement relies extensively on federal subsidies—federal funds account for up to 80 percent of transit agencies' capital expenditure. The subsidy's intent is to improve access to public transportation in urban areas, but the federal funding is not unconditional. To qualify, cities must buy American-made buses.