Path DependencyPath dependency is based on the concept that a few minor shocks or a small initial advantage can alter the course of history. Page (2006) defines path dependency as the casual relevance of preceding events in some type of temporal sequence. It is founded on the view that the events that occur at a prior period of time and the sequence at which those events happen have an influence on how the subsequent events occur in a society’s history. Therefore, this means that what happens today is influenced or depends on what happened in the past.
According to Meyer (2010), path dependency means that occurrences and events that happened in the past determine what will happen in the future. It is based on the opinion that happenings that occurred at an earlier point in time would affect the sequence of events that will occur afterwards. Therefore, in path dependency, history plays an important role in determining what will happen in future. Pierson (2009) affirms that what happened in previous times will affect the potential outcomes and the sequence of occurrences at a later period in time.
In simple terms, path dependency means that future and current decisions, actions and states depend on the path undertaken by the previous states, decisions and actions. Path dependency is concerned with the process in which dynamic events which are characterized by positive feedbacks create various possible outcomes by relying on the specific cycle in which proceedings happen. Pierson (2009) emphasizes that critical occurrences in the historical progressions lead to creation of path dependency and this causes events to occur in a predetermined order.
This makes the concept of path dependency to be dynamic due to the fact that historical events cannot be reversed. Page (2006) observes that path dependence plays an important role in assisting individuals to identify conditions that are essential and sufficient for past outcomes and choices to affect the present occurrences. Path dependency is commonly observed in investment returns, positive feedbacks and in self-reinforcement as well as in making choices. Effect of Path Dependency in Australian Public TransportAccording to Newton (2011) Australian cities have experienced continued growth hence increase in population.
This has in turn made the transport policies in Australia to be heavily dominated by expenditure on roads infrastructure at the expense of other forms of transport. This situation can thus be described as path dependence. Odgers and Low (2010) affirm that the transport infrastructure policies in Australia can best be described as path dependent. This is because the policies relating to public transport have continuously been biased towards expanding roads thereby making the other transport sectors to lag behind. Thus, the high investment in public transport in Australia cannot be justified by the fact that it provides economic benefit but rather due to path dependency.
Newton (2011) notes that the theory of path dependence hypothesizes that the production of commodities does not follow the normal logic that operates in the market whereby supply is dependent on demand. In this theory, chance events play a critical role in determining the kind of products that are produced and offered in the market. Furthermore, once the products produced gain establishment in the market, they are continuously supplied leading to path dependence.
Thus, the transport policies should normally be geared towards responding to consumer demand. However, the Australian public transport policies are formulated without following democratic logic in relation to responding to public demand. According to Odgers and Low (2010), chance events determine which policies are formulated in regard to public transport in Australia. Moreover, political systems in Australia provide incentives which promote these policies and at the same time to maintain established policy settings. Equilibrium is not achieved by increasing investment in one sector of the economy. This is because the law of diminishing returns states that increasing investment in one sector will lead to over decreasing returns in profits.
Therefore, increasing investment on roads does not lead to increased efficiency. This means that the expenditure on transport sector in Australia is path dependence because it cannot be justified economically. Major cities in Australia have thus become path dependent on car transport. Odgers and Low (2010) assert that the high investment in road infrastructure in Australia cannot be defended on the ground that it provides economic benefit. The public transport infrastructure projects in Australia have little rational calculation because they are politically driven hence making them to become path dependent.